Block House

DEFINITION of 'Block House'

A brokerage firm with the primary focus of locating potential buyers and sellers of large trades. A block house typically deals with institutional clients rather than individual investors, since each transaction represents millions of dollars. Examples of institutional clients include mutual funds and pension funds that assume significant security positions. Because of the nature of block house firms, their trading activity can have a considerable effect on the financial markets. Block trades are generally considered to be those dealing with more than 10,000 shares of stock (excluding penny stocks), or any other trade that involves a high monetary value.

BREAKING DOWN 'Block House'

A brokerage firm is a company that acts as an intermediary between buyers and sellers to facilitate transactions. The buyers and sellers must pay commissions and other transaction fees in exchange for the brokerage firm's assistance in executing any trades. A block house is a type of brokerage firm that deals primarily in large trades, with clients ranging from corporations and banks to insurance firms and academic funds. Some investors and analysts try to follow the money or stay ahead of market trends by watching block trade activity. Institutional investors sometimes trade large blocks of securities directly, to avoid brokerage commissions, in a practice called fourth market.

RELATED TERMS
  1. Block Trade

    An order or trade submitted for sale or purchase of a large quantity ...
  2. Block

    A large amount of the same security bought or sold by institutional ...
  3. Fourth Market

    The trading of exchange-listed securities between institutions ...
  4. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network ...
  5. Exchange Distribution

    A type of trade made on the floor of a securities exchange in ...
  6. Distribution Stock

    Distribution stock refers to a large block of a security which ...
Related Articles
  1. ETFs & Mutual Funds

    Understanding Block Trades

    A block trade is the sale or purchase of a large quantity of securities.
  2. Managing Wealth

    What's a Brokerage Account?

    A brokerage account is a contractual arrangement between an investor and a licensed securities broker or brokerage.
  3. Investing

    What’s The Difference Between Institutional and Non-Institutional Investors?

    Institutional investors are the big guys on the block. Non-institutional investors are everyone else.
  4. Managing Wealth

    Understanding Brokerage Fees

    Agents charge brokerage fees for facilitating transactions between buyers and sellers.
  5. Investing

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  6. Investing

    H&R Block Stock Trades Ex-Dividend Thursday (HRB)

    H&R Block will send its dividend payment on July 1 to shareholders of record as of June 20.
  7. ETFs & Mutual Funds

    Bank Failure: Will Your Assets Be Protected?

    The SIPC and FDIC insure against personal financial ruin when banks or brokerages go belly up.
  8. Managing Wealth

    Asset Manager Ethics: Placing and Managing Trades

    Five guidelines have been created to assist asset managers on the best practices for placing and managing trades in client accounts.
  9. Investing

    What is the Secondary Market?

    The secondary market is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves.
  10. Trading

    What is the Difference Between Institutional Traders and Retail Traders?

    The differences between retail and institutional traders lie in the size of the trade, level of sophistication, and the speed of transactions.
RELATED FAQS
  1. When short selling a stock, how long does a short seller have before covering?

    There are no general rules regarding how long a short sale can last before being closed out. A short sale is a transaction ... Read Answer >>
  2. What happens when the lender of the borrowed shares in a short sale transaction wants ...

    In a short sale transaction, shares are borrowed from the lender by the short seller and sold in the market. The lender of ... Read Answer >>
  3. Why are most brokerage firms owned by banks?

    Learn about the differences between investing with a bank-owned brokerage firm or with an independent broker. Get real answers ... Read Answer >>
  4. What is the difference between a national and a regional investment brokerage?

    Learn the differences between a national and a regional investment brokerage, and the advantages and disadvantages of doing ... Read Answer >>
  5. What's the difference between institutional and non-institutional investors?

    There are a number of differences between institutional investors and non-institutional investors. If you are considering ... Read Answer >>
  6. How does a block chain prevent double-spending of Bitcoins?

    Find out how double-spending is prevented in the Bitcoin server and how transactions are posted and verified on the Bitcoin ... Read Answer >>
Hot Definitions
  1. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  2. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  3. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  4. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  5. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
  6. Security

    A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship ...
Trading Center