Algorithmic or algo trading is the use of computers programmed with specific instructions for placing a trade at a speed and frequency impossible for a human trader. Algo trading has a number of risks, the main risk being its potential to amplify market risk. Its tendency to increase market volatility can ripple across to other markets and stoke investor uncertainty. Repeated instances of unusual market volatility could end up eroding many investors' confidence in market integrity.
Dark pools are private exchanges that were created by investment banks who were looking to ensure liquidity for large block trades. Dark pools can operate with little transparency, which can hide conflicts of interest. They have also come under regulatory scrutiny over complaints of illegal front-running.