To: ahhaha who wrote (3109 ) 10/16/2001 12:07:40 PM From: ahhaha Read Replies (1) | Respond to If block trading procedures are necessary, the brokerage firm must then decide whether to "position" the block for its house account, to "shop the block" by contacting potential customers to take the opposite side of the transaction, or to combine these strategies. Upon agreement to a price for the block, the customer's order is transmitted to the floor where it is crossed against the firm's house account and/or against other customer orders, subject to applicable exchange rules. When positioning a block, the brokerage firm quotes a tentative price for the stock. Barring an extreme and unexpected movement in the price of the stock, the customer may be reasonably assured of execution at the quoted price. In "shopping the block", the firm contacts potential customers to take the opposite side at a specified price. The firm might be willing to negotiate this price depending on how interested other investors are in participating in the transaction. The firm continues to contact potential customers until there is a sufficient quantity of orders for the opposite side at a single price. At this point, the firm returns to its original customer to confirm his or her interest in the block transaction at the negotiated price, also known as the ``clean-up price.
