I know this is a rather basic question, but I am confused. Sometimes, I see very large block orders placed and filled (in relation to the normal trading sizes for that particular stock). Yet, most of the time, I see little to no obvious impact on the stock other than that it tends to trade at the price point of the order for a while as the order is filled. Can anyone explain how to possibly trade along with/against these orders to increase the probability for successful short term trades? Thanks, Daryl
What charting platform do you have? I just got a EFS for eSignal that will analyze the ticker/tape for large block orders on the bid/ask and plot them out. It's actually been pretty helpful in seeing the 'big picture'. If you have eSignal I can send it over.
1. A block is obviously "institutional" in scope. 2. More often than not, a block will include a specialist/market maker on one side or the the other. Generally inventory accumulation or disposal. 3. On the NYSE, blocks between member firms do not have to appear on tape. So, IF you're seeing a block, it either has an ax or they want to be seen. 4. Blocks are often consulted with the specialist, to determine depth and time needed to move it. BIG gaps are one avenue. One quick flick of the wrist. Ou of the blue. Helps to have an alibi (such as news whether valild or fluff). . IF someone wants out bad enough, negotiated blocks include concessions away from the prevailing price. 5. Best to stay on the same side as the ax, IF that can be discerned. Beyond that, very little explicit short term trading opportunties. Hmmm, buying extreme weakness on a gap down and out quite quickly has posibiliites. 6. Clusters of blocks probably mean something. Ax being a busy little beaver. As such, represent boundaries to extended moves. Quite often, just above (or below) a round number. 7. Two thirds of institutions under-perform the S&P each year. Without size a fairly easy task, which could be accomplished by my 93 year old grandmother, blind in one eye, and hobbles with a cane by simply, passively, buying an index fund. Morale: You want to be emulating the ax, not institutions.
I use REDI (Goldman Sachs) and was using trade-ideas.com to provide notification of big block transactions. I do not have Esignal but I appreciate the offer.
Thank you Efficiency for the great information! Really helps me to understand what I am seeing. Continued success, Daryl
NP. I used trade-ideas for awhile but stopped. i cant recall why now.. tons of alerts.. CajunSniper / Puretick.com Administrator-Trader
I started monitoring block trades on ES as it seemed to me that good traders would be coming in on the start of moves rather than at the end so if you have a one directional move for an hour or two and then you see a bunch of large trades start crossing the tape, this would signal a reversal. After a few weeks I cannot see any rhyme or reason to it. Large blocks seem to appear at any time and any place on the chart. Dont know about stocks as I donts follow them.
The OP was obviously talking about large block orders as it relates to stocks so your amateurish trading methodology of looking for orders of 10 or more on the YM tape is irrelevant.
Notouch, Trade Ideas *is* for identifing large block orders of STOCKS (not the YM,ES, index). It's a great program if your a stock scalper. Why don't you research what your going to be posting about before being so quick to start flaming and assuming things. That is all I ask. Thanks Cajun
A block of selling can cause a stock to crash or corect intra day demending onthe volume of selling and the energy level of the resistance. This can be determined using some equations i'll post later.