Dark
pools and high-frequency trading - Finance Not Taught In School
Dark
pools and high-frequency trading (HFT), often not taught in school, are
significant elements in modern finance. Dark pools are private exchanges for
trading securities, allowing investors to make large trades anonymously to
avoid market impact.
HFT
involves using complex algorithms and high-speed data networks to execute
trades in fractions of a second, capitalizing on small price discrepancies.
While both aim to enhance liquidity and efficiency, they have sparked concerns
over market transparency, fairness, and stability. Critics argue that these
practices can advantage sophisticated traders over average investors and
potentially lead to market manipulation and flash crashes.
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