Block Trade

A block trade is a large buy or sell order for a stock, commodity, or other security, typically conducted by institutional investors like hedge funds, mutual funds, or pension funds. These trades are used to mask the true size of the transaction to avoid market disruption or unfavorable price movements. The price of the security is privately negotiated between the buyer and seller. Block trades are usually routed through investment banks and executed outside of conventional exchanges to ensure a smooth, discreet transaction without affecting the broader market.