# Lit pool

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'''Lit pools''', also called '''lit markets''', are a type of [stock exchange](/source/stock_exchange). They are effectively the opposite of [dark pool](/source/dark_pool)s or [dark liquidity](/source/dark_liquidity). Whereas ‘dark’ venues do not display prices at which participants are willing to trade, lit pools do show these various bids and offers in different company shares. Primary [exchange](/source/exchange_(organized_market))s operate in such a way that available [liquidity](/source/liquidity) is displayed at all times and form the bulk of the lit pools available to [traders](/source/trader_(finance)).<ref>{{Cite web |url=http://www.atmonitor.co.uk/glossary.aspx?id=158 |title=Glossary &#124; ATMonitor |access-date=2011-01-27 |archive-url=https://web.archive.org/web/20101030113641/http://atmonitor.co.uk/glossary.aspx?id=158 |archive-date=2010-10-30 |url-status=dead }}</ref> The majority of trades, 70%, are transacted over lit pools.<ref>{{Cite web |title=What is Lit pool |url=https://capital.com/lit-pool-definition |access-date=2022-03-17 |website=capital.com |language=en}}</ref> Lit pools are closer to what is generally considered the ideal market, due to their transparency.<ref>{{Cite web |last=Bennington |first=Ash |date=2011-01-12 |title=Dark Pools & Lit Pools: A Financial Morality Tale? |url=https://www.cnbc.com/id/41040999 |access-date=2022-03-17 |website=[CNBC](/source/CNBC)}}</ref>

Whether a market is a lit or dark pool has implications for optimal trading strategies, which are debated by scholars<ref>{{Cite journal |last1=Alessandra Crisafi |first1=M. |last2=Macrina |first2=Andrea |date=2015-02-01 |title=Dark-Pool Perspective of Optimal Market Making |arxiv=1502.02863 |url=https://ui.adsabs.harvard.edu/abs/2015arXiv150202863A |journal=Astrophysics Data System}}</ref><ref>{{cite arXiv |last1=Baldacci |first1=Bastien |last2=Manziuk |first2=Iuliia |last3=Mastrolia |first3=Thibaut |last4=Rosenbaum |first4=Mathieu |date=2019-12-02 |title=Market making and incentives design in the presence of a dark pool: a deep reinforcement learning approach |class=q-fin.MF |eprint=1912.01129 }}</ref> as well as market participants.<ref>{{Cite journal |last=Palmer |first=Max |date=2010-03-20 |title=Dark and Lit Markets: A User's Guide |url=https://guides.pm-research.com/content/iijtrading/2010/1/94 |journal=Trading |language=en |volume=2010 |issue=1 |pages=94–100}}</ref><ref>{{Cite web |last=Goodman |first=Daniel |title=NYSE Floor Trader Explains How Stocks Are Traded In Dark Pools |url=https://www.businessinsider.com/dark-pools-versus-lit-markets-explained-2013-4 |access-date=2022-03-17 |website=Business Insider |language=en-US}}</ref>

== References ==

{{Reflist}}

Category:Financial markets

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Adapted from the Wikipedia article [Lit pool](https://en.wikipedia.org/wiki/Lit_pool) by Wikipedia contributors ([contributor history](https://en.wikipedia.org/wiki/Lit_pool?action=history)). Available under [Creative Commons Attribution-ShareAlike 4.0 International](https://creativecommons.org/licenses/by-sa/4.0/). Changes may have been made.