Dec. 27, 2022
December 27, 2022 Making sure that buy and sell orders face competition on the open market is a crucial component to a fair and efficient market. Transparency is a key principle of the financial markets. It ensures that all participants have equal access to information and allows for the fair and efficient functioning of the markets. By bringing orders to lit exchanges, investors can see the orders and trades that are being executed and can make informed decisions about their own trades. In contrast, the lack of transparency in dark pools can create a lack of confidence and mistrust among investors, which can lead to less liquidity and higher trading costs. Also, lit exchanges are subject to regulatory oversight and are required to follow certain rules and procedures to ensure fair and orderly trading. This helps to reduce the risk of fraud and manipulation and helps to protect the interests of all market participants. Dark pools, on the other hand, are not subject to the same level of regulatory oversight and may not have the same safeguards in place to prevent abuse. Finally, lit exchanges provide a level playing field for all participants, regardless of their size or status. Dark pools, on the other hand, are often used by large institutional investors and may not provide the same opportunities for smaller investors to trade. In conclusion, it is important for stock market orders to be brought to lit exchanges rather than dark pools because of the transparency, regulatory oversight, and fairness that lit exchanges provide. These factors help to ensure the integrity and efficiency of the financial markets and protect the interests of all market participants.