A dark pool is a private forum for trading financial instruments such as equities and derivatives. The service is offered to traders, often representing large financial institutions, who aim to make large trades without telegraphing their intentions in a public venue such as the New York Stock Exchange or NASDAQ. Internally, the dark pool operates just like a public exchange, but the order book, a list of offers to buy and sell, is not visible to any of the participants. Only when matching orders are found the trade is executed and reported externally. Because the large orders are not visible to others, the risk of significant price moves is reduced. The operators of dark pools are trustworthy, but traders are notoriously suspicious. Traders are concerned about any “leakage” of information that might alert others to their intentions and cause price moves against them. The operator sees all orders posted by all participants, including sensitive information such as the volume of the order and the bid or ask price. Because the operator of the dark pool is usually a large financial institution with its own investments in the assets being traded, it may have conflicts of interest with the clients it serves in the dark pool. While such conflicts are mitigated by law and regulation, they continue to exist. We propose a new mechanism that reduce the need of traders to trust the operator of the dark pool. By adopting cryptographic techniques, we achieve a fully private and secure marketplace where sellers and buyers interact with the operator without exposing the volumes or prices of their orders to the operator or to any other counter party. These values remain secret until a matching order is found, and only afterward it will be revealed publicly.
|Title of host publication||Proceedings of the 19th International Conference on Autonomous Agents and Multiagent Systems, AAMAS 2020|
|Editors||Bo An, Amal El Fallah Seghrouchni, Gita Sukthankar|
|Publisher||International Foundation for Autonomous Agents and Multiagent Systems (IFAAMAS)|
|Number of pages||3|
|State||Published - 2020|
|Event||19th International Conference on Autonomous Agents and Multiagent Systems, AAMAS 2020 - Virtual, Auckland, New Zealand|
Duration: 19 May 2020 → …
|Name||Proceedings of the International Joint Conference on Autonomous Agents and Multiagent Systems, AAMAS|
|Conference||19th International Conference on Autonomous Agents and Multiagent Systems, AAMAS 2020|
|Period||19/05/20 → …|
Bibliographical notePublisher Copyright:
© 2020 International Foundation for Autonomous Agents and Multiagent Systems (IFAAMAS). All rights reserved.
- Secure computation