Stock prices can drop even when large quantities of shares are being bought in dark pools due to several factors:
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Lack of Impact on Public Market – Dark pool trades occur off-exchange, meaning they don't directly affect the visible order book or market price. If sellers dominate the lit exchanges, the price can still decline despite buying in dark pools.
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Hidden Selling Pressure – Institutions may use dark pools to offload large positions without impacting the public market. If the volume of hidden selling is greater than the visible demand, prices will drop.
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Market Sentiment and Supply-Demand Imbalance – If public sentiment is bearish, investors may sell on the open market despite institutional buying in dark pools.
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Arbitrage and High-Frequency Trading (HFT) – Some algorithms detect dark pool activity and adjust public market orders accordingly. If institutions are buying in dark pools at lower prices, market makers might drive prices down to accumulate more shares.
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Short Selling Activity – Large funds may short the stock on the open market while accumulating it in dark pools, causing price suppression.
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Earnings, News, or Macro Factors – If negative news or broader market downturns occur, selling pressure can override dark pool accumulation.
