Minimal Market Impact
Dark pools allow institutional investors to trade large volumes without drawing attention from the wider market. When a big order appears on a public exchange, the price often moves against the trader almost immediately. Dark pools keep these orders hidden until they are filled, helping institutions avoid slippage and get closer to their intended price. This is especially important when building or reducing major positions.

Better Pricing for Block Trades
Institutions often deal with block sizes that are difficult to execute at once in a lit market. Dark pools match these trades with other large participants, which can lead to more favourable pricing than breaking an order into many smaller pieces. This also reduces the risk of revealing trading intentions through repeated small transactions.

Greater Privacy and Strategy Protection
Investment firms prefer to protect their strategies from competitors. Dark pools provide a controlled environment where trade details are not visible until completion. This privacy helps institutions rebalance portfolios, shift risk or enter new positions without sending signals that others can exploit.

Lower Trading Costs
Some dark pools offer reduced fees compared to traditional exchanges. They often have tighter spreads for large orders, and avoiding unnecessary price moves can save institutions significant money over time.

Efficient Execution for Algorithms
Institutional traders rely on algorithmic systems to manage order flow. Dark pools provide predictable liquidity and a quiet environment that helps these systems execute more smoothly.

Overall, dark pools give institutions a private, efficient and cost-friendly way to move large amounts of capital.