blocktrade

Blocktrade is a term used to describe a large, privately negotiated trade of a security or asset, typically involving a single block of size large enough to warrant special handling, such as 10,000 shares or more, or an equivalent monetary value. The term can also refer to platforms or desks that facilitate such transactions, especially for institutional clients. Blocktrade transactions are generally executed away from standard lit exchanges to minimize market impact and preserve price confidentiality.

In practice, a blocktrade is negotiated between a seller and a buyer through a broker-dealer or an OTC desk. Terms include quantity, price, settlement date, and any special rights. After agreement, the trade may be routed to a designated block-trading facility or settled bilaterally through clearing systems. For regulators and market participants, blocktrade transactions are reported to appropriate trade-reporting facilities to ensure transparency and surveillance, though details may be restricted during the negotiation.

Blocktrade transactions are favored when counterparties seek to avoid moving prices against them in a high-volume move, or when liquidity is limited. They can offer price discipline, certainty of execution, and reduced impact on the rest of the market, but carry risks such as information leakage, counterparty risk, and timing risk. In crypto or token markets, large OTC trades similarly occur through specialized desks to mitigate slippage and preserve anonymity.