block volume-working?

H

HoCk

-hey...can anyone tell me the importance of block volume..I'm not quite sure how its defined...and what it means other then its just an order for more then 20,000 shares.

-Also, what is the significance of a market maker who has a high percentage of his total volume in block volume.

-Is block volume related to the price of the stock...in otherwords...20,000 shares isn't much on a stock under a dollar, but its a big order on MSFT for example.
 
One thing to keep in mind is that blocks are can be either posted to the tape late (one hedge/insti selling to another(s) off-exchange), or the specialist/mm has been working the stock to accumlate or distribute the shares in order to meet that block BEFORE it is transacted. Especially now with VWAP pricing , in my opinion it is difficult to game the possible outcome of a block printing on the tape, other than to know that there are large interests involved.

If you are on the floor and you are a specialist who is doing alot of block volume, it's generally money in the bag. Imagine knowing the supply/demand for a transaction before the market does, then manipulating the market in order to fill the order whilst providing a nice tithe for your laborius efforts *wink wink*.

Goodluck,
 
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