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. Block House

    A brokerage firm with the primary focus of locating potential ...
  3. Auction Market

    A market in which buyers enter competitive bids and sellers enter ...
  4. Bunching

    The combining of odd-lot or round-lot orders for the same security ...
  5. Iceberg Order

    A large single order that has been divided into smaller lots, ...
  6. Round Lot

    A group of 100 shares of a stock, or any group of shares that ...
Related Articles
  1. Investing Basics

    Stock Basics Tutorial

    If you're new to the stock market and want the basics, this is the tutorial for you!
  2. Fundamental Analysis

    Institutional Investors And Fundamentals: What's The Link?

    Big-money sponsorship might make a company look good, but it's not always a reliable gauge of stock quality.
  3. Retirement

    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 an investment in a particular stock that you've seen publicized in the ...
  4. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  5. Technical Indicators

    What are the signs of a bear market rally?

    Read about some of the signs of a bear market rally, an unpredictable bull movement that takes place in the middle of a stronger downtrend.
  6. Fundamental Analysis

    Why are OTC (over-the-counter) transactions controversial?

    Learn more about over-the-counter transactions, and why OTC traders are considered riskier than traders working with larger market exchanges.
  7. Forex Education

    What's the difference between bid-ask spread and bid-ask bounce?

    Understand the difference between the bid-ask spread that determines the buy or sell price for a stock and a bid-ask bounce, a situational price volatility.
  8. Options & Futures

    How do you trade put options on E*TRADE?

    Learn all about put option trading at E*TRADE. Explore margin accounts and become familiar with the different types of option writing.
  9. Options & Futures

    Do you have to be an expert investor to trade put options?

    Learn about investing in put options and the associated risks. Explore how options can provide risk, which is precisely defined to predetermined limits.
  10. Options & Futures

    Are put options more difficult to trade than call options?

    Learn about the difficulty of trading both call and put options. Explore how put options earn profits with underlying assets fall in value.

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center