Hi Folks,I have a couple of questions related to dark pools.1) Practically speaking, do the trades in dark pool impact displayed/open markets?2) Alternatively, do the prices in the open displayed market affect trading in the dark pools? At a very basic level, the dark pool orders are completely hidden in terms of price & size. So one would tend to assume that a dark pool will not be affected by short term price movements in the open market. Any ideas?GraciasDece

QuoteOriginally posted by: DeceHi Folks,I have a couple of questions related to dark pools.1) Practically speaking, do the trades in dark pool impact displayed/open markets?2) Alternatively, do the prices in the open displayed market affect trading in the dark pools? At a very basic level, the dark pool orders are completely hidden in terms of price & size. So one would tend to assume that a dark pool will not be affected by short term price movements in the open market. Any ideas?GraciasDeceSee where the price discovery takes place, and you will have some 90% of the answer.

Sorry, if this question is too lame .. but how can one figure out where price discovery is happening?

See for example the ITG POSIT website. The oldest and most prominent dark pool. Also study microstructure books and papers.Apart from price discovery some more keywords for you: ECN, MTF, crossing network, hidden liquidity.

I have the same Qs.BTW: what is the size ratio of dark pool to the open market currently?

Thanks for the pointers. Will check them out. Any books that you can recommend will be a good helping hand. I read a few chapters from Trading & Exchanges By Larry Harris but does not seem to be answering my questions.Thanks Again,Dece

Hi WellBe,I do not remember the exact source but I think I read some where that around 10% of US Equity trade volume is in dark pools daily.

You may find Hasbrouck's book a bit more helpful.

http://papers.ssrn.com/sol3/papers.cfm? ... id=1344583