Block Trade

AAA

DEFINITION of 'Block Trade'

An order or trade submitted for sale or purchase of a large quantity of securities. A block trade involves a significantly large number of shares or bonds being traded at an arranged price between parties, outside of the open markets, in order to lessen the impact of such a large trade hitting the tape.


Also known as "Block Order."

INVESTOPEDIA EXPLAINS 'Block Trade'

In general, 10,000 shares of stock (not including penny stocks) or $200,000 worth of bonds would be considered a block trade. However, in practice block trades are typically much larger as large hedge funds and institutional investors buy and sell huge sums of dollars and shares in block trades via investment banks and other intermediaries virtually on a daily basis.

RELATED TERMS
  1. Block Trading Facility - BTF

    A wholesale trading facility that allows traders to buy or sell ...
  2. Auction Market

    A market in which buyers enter competitive bids and sellers enter ...
  3. Iceberg Order

    A large single order that has been divided into smaller lots, ...
  4. Block House

    A brokerage firm with the primary focus of locating potential ...
  5. Round Lot

    A group of 100 shares of a stock, or any group of shares that ...
  6. Bunching

    The combining of odd-lot or round-lot orders for the same security ...
Related Articles
  1. Stock Basics Tutorial
    Investing Basics

    Stock Basics Tutorial

  2. Institutional Investors And Fundamentals: ...
    Fundamental Analysis

    Institutional Investors And Fundamentals: ...

  3. What's the difference between institutional ...
    Retirement

    What's the difference between institutional ...

  4. Bond Basics Tutorial
    Retirement

    Bond Basics Tutorial

comments powered by Disqus
Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  3. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  4. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center