What are block trades & how do they work?

Advisory firms that manage individual portfolios use block trades instead of separate smaller transactions for each client account. Corporate insiders may use block trades to buy or sell their holdings. Block trades are privately negotiated by wholesalers, or block houses. Block houses are brokerages that specialize in block trading.

Should you buy block?

Here are some things to consider: Block is priced on the assumption it will be in growth mode for years, so only investors who plan to hold for three to five years (the longer the better) should buy.

What is a block of securities?

There is no official size designation constituting a block of securities, but a commonly used threshold is more than 10,000 equity shares or a total market value of more than $200,000. Securities traded in block trades facilitate trading by institutional investors or other large investors that require such bulk trades to meet their needs.

What is a block & how does it work?

A block is a large amount of the same security bought or sold by institutional or other large investors.