Block Trade
Market Microstructure glossary · Market Impact & Execution Algorithms
Definition
A large trade (typically 10,000 shares or more) that is too large to execute without significant market impact. Often negotiated in the 'upstairs market.'
Block Trade in plain English
A block trade is a giant order — think 10,000 shares or more — so big that if you just threw it onto the open market, your own buying would shove the price up (or your selling would crater it) before you finished. It's like trying to buy every ticket to a concert at once: the moment sellers see that hunger, the price jumps against you. To avoid that, big players quietly negotiate these deals off to the side, in what's nicknamed the "upstairs market" — private, hand-arranged trades away from the public order book. The whole point is to move a huge amount without tipping off the crowd and moving the price against yourself.
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