Trader: No, in fact, most of the time they buy at the ask. He said that it really depends on how badly (the time and size of trade) they want the stock. If they want it asap, they will buy the whole block from the specialist at the ASK. But if they are only willing to pay (limit price)and/or are not in a hurry to acquire the stock, the traders will break up the order, i.e. send 5000 to the the floor, 1000 to DOT, 4000 to instinet to get price improvements. He didn't say much about buying at the BID since it is not always available. ( I am thinking only when there is another party that's willing to sell at a price that happens to be the BID price at the moment could it go through at the BID).
Joe,
Thanks for posting some very, very helpful information. If what you are saying is accurate (and I have no reason to doubt you), this means that the block trades at ASK are indicative of institutional buying. That is very important to know.
It also means that, when the stock declines notwithstanding institutional accumulation, it may be retail selling (or institutions that have broken the shares into blocks too small to bother tracking).
Given your post, it makes sense to continue posting the block information, along with commentary on whether they went off at the ASK (a purchase) or BID (a sale).
Thanks again.
Gary Korn |
