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Spoofing, Surveillance and Supervision

Jay Biondo, Product Manager - Surveillance at Trading Technologies, co-authored an article along with James Lundy and Nicholas Wendland, both of Drinker Biddle & Reath LLP, reviewing the CFTC's regulations and expanding efforts, 21st century surveillance and supervision, as well as strategic recommendations.

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May 25, 2007

Projecting Dark Pools

By Michael Scotti

In the year 2010, dark pools will account for 1.5 billion shares a day, comprising 15 percent of the total volume in the equity markets. That's according to a report by the TABB Group co-authored by Jeromee Johnson entitled, "Groping in the Dark: Navigating Crossing Networks and Other Dark Pools of Liquidity."

The study also breaks down the market share expected for the various electronic crossing networks in 2010: Independent networks will account for 48 percent of all shares executed in dark pools; brokers' internalized order flow-both retail and institutional-will account for 43 percent; and exchanges will account for 9 percent. Johnson estimates that the average daily volume of all shares traded in the market in 2010 will be slightly less than 10 billion shares.

Today, current volume executed in dark pools accounts for about 420 million shares a day, or about 10 percent of all shares executed. Dark pool volume should reach 512 million shares a day by the end of the year, according to the report.