Block Trade

A single, privately negotiated trade of a very large quantity of securities.

A block trade is a large order — conventionally 10,000+ shares or a substantial dollar value — negotiated off the open market to avoid moving the price. Institutions use block desks or dark pools because dribbling a huge order into the order book would telegraph their intent and worsen their own execution. The risk transfers to the intermediary: a bank buying a block at a discount must unload it quietly. The 2021 Archegos collapse unleashed some of the largest block trades in history as banks dumped its positions.

The fund unloaded its stake through a block trade priced at a 4% discount to that day's close.