"It was an investor's marketplace," Mahoney said. "We saw long-term money going into mutual funds and traditional investors and that money flowed into the market," he said. "Low volatility favors the fundamental investor."
Liquidnet Holdings Inc.'s two venues saw the biggest increase in trading volume in January versus December, with the number of shares handled almost doubling for both, according to Rosenblatt.
Deutsche Bank
Deutsche Bank AG's dark pool, called Super X, had a 0.7 percent market share in January after shares matched surged more than 6,200 percent from a year earlier to 50.7 million a day, the report said.
European and Canadian dark pools also had record trading in January, Rosenblatt said. The 17 European pools tracked by the broker had 4.6 percent of trading, compared with 3.8 percent in December and the previous record of 4.2 percent in October, the brokerage said.
Canadian venues that match equity orders without showing prices in advance reached a record high of 4.45 percent in January. The biggest are ITG's MatchNow and Alpha Group's Alpha IntraSpread, Rosenblatt said.
Lower volatility means the cost of taking liquidity, or executing against bids or offers, may be higher compared with trading in a dark pool at the midpoint of the best available prices, Selway said. The share of institutional trading in dark pools tends to rise when volatility is lower, he said.
"Waiting for serendipity in a dark pool doesn't make sense when volatility or correlations are very high," he said.