Bringing Back the Block: Brokers are offering capital to their best clients, and some like what the
Traders Magazine, July 2006
The handling of large blocks of stock by human traders, written off as a dying art in this age of algorithms, may be making a comeback. Bulge-bracket shops appear more inclined to put their capital on the line to win back the higher margin block business and buyside desks have their own agendas. Wall Street's biggest firms want more of that institutional flow, and are willing to use more of their capital to get it. This strategy has coincided with an uptick in block trading over the last six months, traders anecdotally report. "The pendulum is swinging back to block trading," says David Briggs, global head of equity trading at Federated Investors. "We've driven down the costs of trading, and now we have to figure out how to capture alpha."
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