What is block trading?

 Block trading refers to the buying or selling of a large quantity of securities in a single transaction. These large transactions, also known as block trades, are typically executed outside of the regular trading sessions on the exchange and are typically used by institutional investors or large traders.

Block trades are typically conducted by large institutional investors such as mutual funds, pension funds, and hedge funds, as well as by large traders such as market makers and high-frequency trading firms. These traders often use block trades to execute large trades without significantly impacting the market price of the security.

Block trades are typically executed through private negotiations between the buyer and seller. The buyer and seller agree on the price and the number of shares to be traded, and then the trade is executed on a private platform, such as dark pool or crossing network, away from the regular trading on the exchange. This is done to minimize the impact on the market price of the security and to allow the large trades to be executed with minimal market impact.

Block trading is an important tool for large traders to manage their positions and execute large trades efficiently, while also providing liquidity to the market.