What is a Block Trade?
A block trade or block order is an order for a very large volume of securities. Generally, trades of 10,000 or more shares of stock are considered block trades, as are trades of bonds with a value of more than $200,000 US. Individual players rarely engage in block trades because they are so large; institutions such as universities and banks are usually the forces behind such trades. Since a high volume of trading can impact the market value of a share, block trades must be carried out carefully. Typically, block trades are handled through a block house, a firm with specializes in such trades. The block house retains staffers who are skilled at handling block trades, and the firm may also have special relationships with other traders and firms to make block trading easier. Generally, a customer places a block order with the staff of the block house, and trusts the staff to get the best deal. When buying up shares on the open market, a block house must move carefully, because the staff d
I bought stock in Rite Aid (RAD) when it went down to 5 a few weeks ago, the stock has since hit 13, but on almost a daily basis I see this posted from Reuters: BLOCK TRADE – Rite Aid Corp 500,000 December 21, 1999 03:21 PM at 12-7/8, up 1/16, bought by Salomon Smith Barney … Sometimes more than once a day…. They sell low, and buy high… doesn’t make sense to me… Check out the latest news releases from any stock reporting tool and you’ll see what i mean.
