What is a block order?

, also known as a block store, is an order block Business order, which is sufficiently larger than most standard size orders. The trade with this type usually must include a minimum number of shares or the minimum value of securities to qualify as a block order. There are several ways to structure this type of order or trade, each method representing certain advantages and disadvantages.

The simplest access to the block order is to present a huge number of shares for immediate sale as the only trade. For example, an investor who wants to sell ten thousand shares of a given security would make an order to sell these shares as a block, which means that one buyer buys all offered shares. The advantage of this approach is that the seller receives compensation from sales in one lump sum, rather than incremental revenues from more buyers. A possible disadvantage of this type of huge order to sell is that it could have a harmful effectTo the tube, especially if the shares are sold with a discount.

A different approach to the order of the block is known as Iceberg Order. With this approach, the owners give a broker or agent to sell a huge number of shares of the same security, but offer stocks in smaller increments for a certain period of time. The idea here is to sell shares in a way that does not lead to mass speculation about a threatening problem that would undermine the value of these shares. By selling several shares of the total block order at the same time, there is a much less chance that it will adversely affect the market value of shares, or by creating concerns that cause a certain level of chaos on the market where shares are traded.

There are situations in which the owner may want to sell a huge amount of shares in a short period of time. This is sometimes a case when an unforeseen financial emergency situation was created and the owner needs to deal with this emergency situatione an immediate inflow of cash. In circumstances of this type, the owner of the broker may instruct to process the order of the block with the required price, which is below the current market value. It effectively places stocks on the market on what is known as a discount on blocking.