Trading in the Shadows: The Role of Dark Pools in Institutional Forex The forex market is often depicted as a transparent ocean of flashing quotes and public order books. However, a significant portion of Institutional Forex volume is executed away from the public eye in private venues known as Dark Pools. These alternative trading systems (ATS) are non-displayed liquidity pools where large institutions can execute block trades without revealing their intentions to the broader market beforehand. Understanding the function of these opaque venues is essential for any participant in forex trading who wants to grasp the complete picture of market structure and liquidity. The Primary Purpose: Minimizing Market Impact Why would an institution choose to trade in the dark? The principal reason is...
