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How Do ‘Mid-Point’ Dark Pools Operate?

'Mid-point' dark pools operate by matching buy and sell orders at the mid-point price between the National Best Bid and Offer (NBBO) from the public exchanges. This mechanism ensures that both the buyer and the seller receive a price improvement (better than the current best bid or best offer) while maintaining anonymity and minimizing market impact.

Explain the Concept of “Pegging” a Limit Order to the Best Bid or Offer
Define “Internalization” of Orders and Its Potential Impact on Price Improvement
How Does ‘Midpoint Matching’ Facilitate Trade Execution in a Dark Pool?
What Is the Risk of ‘Adverse Selection’ in a Dark Pool?