Does the Lack of Pre-Trade Transparency in Dark Pools Affect Market Price Discovery?

Yes, the lack of pre-trade transparency in dark pools can potentially affect the overall efficiency of price discovery. Since a significant volume of trading is hidden, the public order book may not fully reflect the true supply and demand.

However, proponents argue that dark pools only delay price discovery, as the trade is reported post-execution, and that the prevention of market manipulation outweighs this effect.