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Study links ‘dark pool’ trading to higher risk of sudden stock price crashes

Study links ‘dark pool’ trading to higher risk of sudden stock price crashes

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Credit: Pixabay/CC0 Public Domain

More stock trading is moving away from traditional public stock exchanges and into places called “dark pools.” These are private, electronic markets where investors buy and sell stocks without showing their orders to the public. Even as dark pools have grown increasingly popular, a recent study from the University of Missouri suggests they may make public stock markets less transparent and increase the risk of sudden stock price crashes.

Dark pools allow buy and sell orders to be submitted and matched electronically without public…

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