Significance of block prints in Nasdaq

S

samtrader

I have searched past elitetrader articles and didn't find much on this subject.

I'm not looking for an absolute answer, just different points of view from Nasdaq Day-traders. Some of the questions I have are:

What meaning, if any, do the large 25K-50K blocks have?
What is the short term significance of Block prints in Nasdaq stocks?
I'm particularly interested in their weight on momentum trading/scalping.
What significance do large prints play in liquid stocks like INTC or MSFT on very short time frames,i.e. the next minute/moves of a dime to a quarter?
Are they just prints sent late by the MarketMakers?
If they have any value, in what type of situations are they most valuable? (i.e. consolidation, resistance/support or short term momentum trends)
Should I just disregard/ignore them?

Thank you for your assistance,
samtrader
 
sam.. i dont think blocks are much use for trading nasdaq stocks.. the reason being that by the time you see the block, the market maker has already hedged.. in other words.. say a customer comes to gsco and says i want to buy 100k of AMCC.. gsco then begins to acquire shares.. when he has 50k, he prints 50k to his customer.. then he acquires another 50 at various prices and when he is done he prints the other 50k to his customer.. we see the 50k prints, but they dont tell us if he is buying or selling.. or if there is more buying/selling to be done.. and sometimes market makers wont even print the large blocks until the end of the day.. one thing that i have found interesting is when a stock is near its high/low of the day and then prints a large block at a new high/low.. that to me is one more confirmation of a breakout/breakdown because i figure the market maker wouldnt strand the print at the high/low beause his customer wouldnt appreciate being filled at the worst price of the day.. but i dont trade off that info, its just useful to confirm a setup.. the nyse is a whole different ballgame.. large prints are much more easily interpreted there.. my .02

-qwik
 
Originally posted by qwiktrade
.. i don't think blocks are much use for trading nasdaq stocks.. the reason being that by the time you see the block, the market maker has already hedged.. qwik
More...

qwiktrade,
Thank you for the clear explanation. One other question. What would you consider a large enough block, (in Nasdaq liquid stocks), that should be ignored (most of the time)? Again, looking from a very short term time-frame, the majority of the time, would you ignore any blocks of over 2K/3K? Or would only blocks of more than 25K likely to be not of much value to Day-traders?

I appreciate your help,
samtrader
 
Don't try to read much into block prints.... I have not found them useful for trading.... Maybe others have. I would like to know.
 
Samtrader:

Generally, in those liquid stocks you are talking about, the market maker will print the customer on nice round lots like 10m, 25m or 50m shares. It usually depends on how big the customer order is and how liquid the stock is. Once the trader accumulates enough stock (if he/she is buying) it makes sense to print it as soon as possible for two reasons. First, so that the price to the customer is somewhat near where the stock is trading when the trade is reported to the customer, and second to "lock in" the trade (make sure the customer doesn't "back out"). Any prints 100m or over are usually negotiated blocks where the broker has one or more buyers and one or more sellers, and puts them together. Probably the minimum size "block" for those stocks that you mentioned would be 10m shares, but again, it really depends on the circumstances. Some smaller customers do buy 5m shares or even less sometimes for their retail clients.

DeeMan
 
Originally posted by samtrader
What would you consider a large enough block, (in Nasdaq liquid stocks), that should be ignored (most of the time)?
More...

sam.. im watching level II.. if i see any block go by that does not reduce the size of one of the participants on L2 then i dont give it much significance.. if thats 3k or 5k or 100k.. especially if the block is not at the best bid or ask, which is often the case.. you dont want to filter these blocks out because sometimes they will give you clues.. for instance sometimes you will see a market maker try to crank a stock with a large bid or offer on an ecn that they really dont intend to get filled.. they are just trying to scare the other market participants.. if you see someone flash a bid for 30k shares on REDI on RFMD and then someone hits them for a 17k block.. you know that at a minimum there are interested sellers.. but quite possibly the guy who flashed that block will want out, adding to the selling pressure.. if the asks start lifting on very little volume and people start stepping in front of the big bid, then that paints a whole different picture..

-qwik
 
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