The majority of US stock trades now occur off-exchange, with private trading venues like dark pools and internal firm networks accounting for 51.8% of total volume in January. This marks the fifth consecutive monthly record, signaling a long-term shift in market structure that has been years in the making. Experts warn that reduced public price visibility may worsen price discovery and increase costs for investors over time.
Despite these concerns, institutional investors are increasingly favoring alternative venues to execute large trades without causing price fluctuations. Market participants remain divided—some argue that these changes improve efficiency, while others worry they could lead to market distortions in the long run. The growing reliance on private trading networks underscores a fundamental transformation in how stocks are priced and traded on Wall Street.
“Theoretically, the more trading that goes off-exchange, the fewer orders there are on-exchange competing to determine the best price.” — Larry Tabb, Bloomberg Intelligence
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Wall Street Enters Darker Age With Most Stock Trading Hidden
SOURCES
Bloomberg, Jan 2025 - Wall Street Enters Darker Age With Most Stock Trading Hidden
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