Darker Than a Dark Pool? Welcome to Wall Street's 'Private Rooms'

“It’s about exercising control, what liquidity a broker wants to interact with to achieve better execution quality,” says Roman Ginis, CEO of Imperative Execution, the parent company of IntelligentCross. Dark pools are so-called because the trades they handle happen away from the “lit” public exchange. That helps prevent order details leaking to the broader market and triggering adverse price moves before they can be executed. But there’s still a downside: a pool is open to anyone, and firms inside never know who their counterparty is in any trade. Private rooms can be even more discreet. But they’re seeing rapid adoption by everyone from broker-dealers and market makers to hedge funds and asset managers, so much so that private-room volumes at one major ATS — Stamford, Connecticut-based IntelligentCross — now eclipse the total trading activity at nine rival dark-pool operators. Right now, it’s impossible to say how many private rooms exist, or how much activity is moving through th ... Read full article.