What is the best way to get rid of a big block of stock without moving the market? Say, 200,000 shares ? Would you break it down in 5000 blocks, 10,000? Are there any strategies out there to do that (MM, institutional traders may be able to help out). Obviously it depends on the liquidity of the underlying, but for hypotheticals, let's say a highly liquid stock (5-10M). Thanks.
I usually just market the order when I have a block between 20K and 30K. The specalist usually gives me a good fill. I used to break the blocks up, but after sending soo many small orders I received a call stating it was against NYSE rules to break up a block. If the order is 200K I break the rules and send 4 orders of 100K each, then once one fills I cance the other 3 wait for a rally and do it again.
This does not make any sense. Breaking up orders into block cannot be illegal, how would one trade otherwise.
trader963 did not say illegal, said against NYSE rules ... Just another rule to help putting a bigger turkey on the specialist's dinner table ...
Agency trading can be extremely helpful for executing block orders. Traders that use multiple destination routing can keep clients under the radar.
Any clue exactly what rule this is supposed to break? It seems to be a fundamental component of trading to not reveal one's true size immediately when working a potentially market-moving order. I know the option exchanges have this rule, ostensibly designed to prevent abuses of auto-ex. I think NYSE has the rule specifically related to abuse of the NX route, but the kind of size being discussed isn't NX-eligible.
Once Howard Hughs sold 780,000 shares of TWA at the market. The story is told because it really didn't shake the market up all that much.