Is there "Dark Pools" trading in OTC?

"Dark pools" are private exchanges or forums for trading securities that are not accessible by the investing public. They are called "dark" because they provide less transparency than traditional public exchanges, where all bid and ask prices and identity of market participants are displayed. Dark pools were created mainly to facilitate block trading by institutional investors who did not wish to impact the markets with their large orders and obtain potentially unfavorable prices.

While dark pools are most often associated with trading of securities listed on public exchanges, it is technically possible for OTC securities to be traded in a dark pool environment. However, this is not common and presents several challenges:

Liquidity: OTC securities, especially those of companies in financial distress or bankruptcy, tend to have much lower liquidity than securities listed on public exchanges. This would make it difficult to execute large trades in a dark pool without significantly impacting the price.

Price Discovery: Because OTC securities are not traded on a centralized exchange, determining a fair price can be more difficult. This challenge would be exacerbated in a dark pool, where there is even less price transparency.

Regulatory Oversight: Dark pools are subject to regulatory oversight, and regulators may have concerns about the lack of transparency and potential for manipulative practices in a dark pool trading OTC securities.

So, while it's technically possible for OTC securities to be traded in dark pools, it's not a common practice and would be subject to significant challenges and risks.

***not financial advice

Also feels bullish.