Wc

Front 1

a cap of 8% is to be imposed on
the total consolidated amount traded in any stock during a trading day in the dark and 4% of total trading per stock on a single dark venue. What will happen?

Back 1

dark pools will be opened, dark pool fragmentation-> execution risk up-> informed will move to lit (price discovery up)

Front 2

Given analogy between limit orders and options, how would you expect the bid-ask spread to be related to volatility in stock prices?

Back 2

As volatility rises, options become more valuable. So limit order submission would be at worse prices, so spreads should rise.

Front 3

Effects of dark fragmentation

Back 3

-reduced anonimity
-increased execution risk (less counterparties)

-informed traders move to lit exchange, higher BAS