Dark Liquidity Law and Legal Definition

Dark Liquidity are crossing networks that provide liquidity that is not displayed on order books. This is useful for traders who wish to move large numbers of shares without revealing themselves to the open market. Liquidity in standard financial markets is often openly advertised in order to attract additional liquidity to that venue and is usually done in real time by publishing market depth. Dark liquidity is generally used to try to reduce market impact when trading large orders. However, they are recorded as over-the-counter transactions. Therefore, detailed information about the volumes and types of transactions is left to the crossing network to report to clients if they desire and are contractually obligated. It is also known as Dark Pools of Liquidity.