What Is the Primary Mechanism by Which a Dark Pool Prevents Front-Running?
A dark pool prevents front-running by not displaying the order size or price to the public before execution. Orders are matched based on the best bid and offer from a lit (public) exchange, or through internal price discovery, without revealing the intent to buy or sell a large volume.
This lack of pre-trade transparency is the core protective mechanism. The anonymity of the order ensures that other traders cannot trade ahead of the block order.