Dark pool trading is the activity of buying and selling securities in dark pools: trading venues where orders are not shown to other participants before they are executed. The main entry describes the venues themselves, who operates them and how they are regulated; this entry notes how the term is used for the practice of trading in them.
Institutional investors route orders to dark venues mainly to reduce market impact. A pension fund selling a large holding on a displayed order book would reveal its intention and push the price down before it finished. In a dark pool the order rests unseen and is matched, usually at the midpoint of the best bid and offer on the public market, when an opposite order arrives. Brokers' algorithms and order routing systems split orders between lit and dark venues as part of seeking best execution.
Trades are published after execution, so dark trading is hidden only beforehand. Regulators limit it because heavy use can weaken price discovery on public markets, and they police pools for unfair treatment of client orders.