Dark pools exist for large players to exchange assets among themselves that may not be part of the S&P 500 and not necessarily listed on major exchanges like the NYSE. 

Some of the key features of dark pools include:

• Anonymity: Participants can execute trades without disclosing their identity, order size, or intentions to the broader market
• Reduced Market Impact: Large orders can be executed with minimal impact on stock prices, as they are not visible to other traders
• Block Trading: Dark pools are well-suited for executing block trades, which involve large quantities of shares
• Price Improvement: Some dark pools offer price improvement opportunities for traders, allowing them to buy at a lower price or sell at a higher price than the best public quote
• Lack of Pre-trade Transparency: Unlike public exchanges, dark pools do not display bid and ask prices or order book information before trades occur
• Increased Liquidity: Dark pools contribute to overall market liquidity by facilitating trading without the need for immediate public price discovery

Despite their benefits, dark pools have faced scrutiny and criticism, as they can reduce transparency in financial markets and potentially lead to information asymmetry.

Regardless, dark pools still exist in even the most advanced economies and their trading volume is substantial. 

Notable Dark Pool - Goldman Sachs’ SIGMA X

Some dark pools are well-known on the market and are created by some of the largest financial institutions, such as commercial and investment banks, such as JP Morgan and Goldman Sachs, among others. 

Goldman Sachs’ SIGMA X is one of the largest dark pools in the United States that serves institutional clients of Goldman. 

SIGMA X was initially launched in 2005 as an electronic platform. Some of the notable features of SIGMA X include:

• A platform for trading large blocks of shares with reduced market impact. It focuses on facilitating block trades
• The platform offers a high level of anonymity, ensuring that trading intentions, order size, and the identity of the participants remain confidential
• It provides access to liquidity and execution services for institutional clients, allowing them to execute orders efficiently and discreetly

Like all dark pools, SIGMA X is subject to regulatory oversight and complies with the rules and regulations governing the operation of such venues.

For example, Goldman Sachs and SIGMA X are required to report trading data and adhere to transparency and fairness standards as mandated by regulatory authorities.

SIGMA X is considered a significant player in the dark pool industry, and it is widely used by institutional investors seeking to execute large block trades with minimal market impact.

• Dark pools are private exchanges that exist between institutional investors to exchange assets among themselves
• Goldman Sachs’ SIGMA X is a notable dark pool that has existed since 2005 
• Dark pools are not unregulated and dark pool operators are subject to government oversight to fight illicit activity
• Orders on dark pools are executed in blocks, as dark pools are designed to handle bulk orders made by institutional investors