Quote from efficiency:
1. A block is obviously "institutional" in scope.
2. More often than not, a block will include a specialist/market maker on one side or the the other. Generally inventory accumulation or disposal.
3. On the NYSE, blocks between member firms do not have to appear on tape. So, IF you're seeing a block, it either has an ax or they want to be seen.
4. Blocks are often consulted with the specialist, to determine depth and time needed to move it. BIG gaps are one avenue. One quick flick of the wrist. Ou of the blue. Helps to have an alibi (such as news whether valild or fluff). . IF someone wants out bad enough, negotiated blocks include concessions away from the prevailing price.
5. Best to stay on the same side as the ax, IF that can be discerned. Beyond that, very little explicit short term trading opportunties. Hmmm, buying extreme weakness on a gap down and out quite quickly has posibiliites.
6. Clusters of blocks probably mean something. Ax being a busy little beaver. As such, represent boundaries to extended moves. Quite often, just above (or below) a round number.
7. Two thirds of institutions under-perform the S&P each year. Without size a fairly easy task, which could be accomplished by my 93 year old grandmother, blind in one eye, and hobbles with a cane by simply, passively, buying an index fund. Morale: You want to be emulating the ax, not institutions.
