Lit pools, also called lit markets, are a type of stock exchange. They are effectively the opposite of ‘dark’ pools or
dark liquidity
In finance, a dark pool (also black pool) is a private forum (alternative trading system or ATS) for trading securities, derivatives, and other financial instruments.stocks. Primary
exchange
Exchange may refer to:
Physics
*Gas exchange is the movement of oxygen and carbon dioxide molecules from a region of higher concentration to a region of lower concentration. Places United States
* Exchange, Indiana, an unincorporated community
* ...
s operate in such a way that available
liquidity
Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include:
* Market liquidity, the ease with which an asset can be sold
* Accounting liquidity, the ability to meet cash obligations when due
* Liq ...
is displayed at all times and form the bulk of the lit pools available to traders. The majority of trades, 70%, are transacted over lit pools. Lit pools are closer to what is generally considered the ideal market, due to their transparency.
If a market is a lit or dark pool has implications for optimal trading strategies, which are debated by scholars as well as market participants.