bot's, algos, hft and all things evil , page-17

You are spot on Ross.

Not only that, but about 30% of all equity trading is done in dark pools. These trades must eventually be registered in the lit exchange (ASX etc). Dark liquidity cannot be registered for less than the lit exchange price. Therefore, it is common for bots operating on algos from the principal in the dark pool to move the SP up or down to suit their need.

Initially, dark pools were approved to facilitate very large trades. That made since at the time as it avoided adverse movements in the lit SP. However, over time the dark pools are now doing far more small trades than just the large trades. This now means the market is at far greater risk of shady and dirty tactics by market principals and market makers.

Cheers