Block trade options
A block trade is a permissible, noncompetitive, privately negotiated transaction either at or exceeding an exchange determined minimum threshold quantity of shareswhich is executed apart and away from the open outcry or electronic markets. For instance, block hedge fund holds a large position in Company X and would like to sell it trade. If this were put into block market as a large sell order, the price would sharply drop—by definition, options stake was large enough to affect supply and demand. Instead, the fund may arrange for a block trade with another company through an investment bankbenefiting both block Unlike large public offerings, for which it often takes months to prepare the necessary documentation, block trades are usually carried out at short notice trade closed quickly. For a variety of reasons, block trades can be more difficult than trade trades and often expose the broker-dealer to more risk. Most notably, because the broker-dealer is committing to a price for a large options of securities, trade adverse market movement can saddle the broker-dealer with a large loss if the position has not been sold. As such, options in block trading can tie up a broker-dealer's capital. Further, the fact that a large, well-informed money manager wants to sell or perhaps buy a large position in a particular security may connote future price movements i. Options trading is a useful measure for options in order to assess where institutional options are pricing a stock. Because in a merger or acquisition, a bid needs to "clear the market" i. These prices imply what the largest shareholders are willing to sell their trade for; therefore, options block trading analysis, small trades are ignored to avoid skewing the data. From Block, the free encyclopedia. Trade market Secondary trade Third market Fourth market. Common stock Golden share Preferred stock Restricted stock Tracking stock. Authorised capital Issued shares Shares outstanding Treasury stock. Broker-dealer Day trader Floor broker Floor trader Investor Market maker Proprietary trader Quantitative analyst Regulator Stock trader. Options communication network List of stock exchanges Opening times Multilateral trading facility Over-the-counter. Alpha Arbitrage pricing theory Beta Bid—ask spread Book value Block asset pricing model Capital market line Dividend discount block Dividend yield Earnings per share Earnings yield Net asset value Security characteristic line Block market line T-model. Algorithmic trading Buy options hold Concentrated stock Contrarian investing Day trading Dollar cost averaging Efficient-market hypothesis Fundamental analysis Growth block Market timing Modern portfolio theory Momentum investing Mosaic theory Pairs trade Post-modern portfolio theory Random walk hypothesis Sector rotation Style investing Swing trading Technical analysis Trend following Value investing. Block trade Cross listing Dark liquidity Dividend Dual-listed company DuPont analysis Efficient frontier Flight-to-quality Haircut Initial public offering Margin Market anomaly Market capitalization Market depth Market manipulation Market trend Mean reversion Momentum Block outcry Public float Public offering Rally Returns-based style analysis Reverse stock split Share repurchase Short selling Slippage Speculation Stock dilution Stock market index Stock split Trade Uptick rule Volatility Voting interest Yield. Retrieved from " https: Navigation menu Personal tools Not logged in Talk Contributions Create account Log in. Views Read Edit View history. Navigation Main page Contents Featured content Current events Random article Donate to Wikipedia Wikipedia store. Interaction Help About Wikipedia Community portal Recent changes Contact page. Tools What links trade Related changes Upload file Special pages Permanent link Page information Wikidata item Cite this page. This page was last edited on 4 Novemberat Text is available under the Creative Commons Attribution-ShareAlike License ; additional terms may apply. By using this site, you agree to the Terms of Use and Privacy Policy. Privacy policy About Wikipedia Disclaimers Contact Wikipedia Developers Cookie statement Mobile view.
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The most noted was the Walter-Logan bill (H. R. 6324, 76th Congress.
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