What 'private trading' means: hidden size, price, intent and identity
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Breaks 'private trading' into four targets: hidden size (iceberg), price (dark liquidity), intent and identity. A venue can be private on one axis and transparent on others, so ask 'private what?'.
WTF does "private trading" actually mean?
“Private trading” is an overloaded term. In practice, venues are usually trying to hide one (or more) specific attributes of an order. Hiding different attributes solves different problems and introduces different tradeoffs.
The four common “privacy targets” are:
➤ Hidden size: other traders can see there is an order, but not the full quantity (or only a slice). Iceberg/reserve orders are the classic mechanism.
➤ Hidden price: the order’s price is not displayed (or it executes at a reference price like midpoint), so it doesn’t anchor the visible book. Dark liquidity mechanisms are typically “non-displayed” pre-trade.
➤ Hidden intent: the market can’t infer what you’re about to do (direction, urgency, size trajectory). This targets information leakage that enables front-running and “fading the quote.”
➤ Hidden identity: counterparties can’t link the order (or fills) to a specific participant/wallet. Traditional dark pools emphasize anonymity pre-trade; crypto privacy systems try to prevent on-chain linkage.
A venue can be “private” on one axis and fully transparent on others. For example:
➤ An iceberg order hides size, but the price is still visible and intent can still leak as slices refresh.
➤ A dark pool hides price/size pre-trade and often identity, but you still need some form of post-trade reporting/settlement rules.
So when someone says “we’re building private trading,” the useful follow-up is: private what, exactly?
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