Block trade is an exchange of a fixed number of securities at an agreed price between two parties. Unlike an ordinary trade, the number of securities can be quite high in block trades. A block trade might involve 10,000 or more shares for a single stock or security. Block trades are common and might not cause any major moves in markets. Although they can have an impact on prices of specific stocks or securities being traded. A block trade transaction is generally conducted with the help of an intermediary like an Investment bank through a large broker or dealer and can be risky from the broker’s perspective. Block trades are conducted preferably outside of normal trading sessions, so as to prevent any untoward price fluctuations.
