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March 18, 2010

The Return of the Big Block Print

By Peter Chapman

Block trading has rebounded from the dark days of 2008, when the stock market crashed. According to research from Credit Suisse, prints of more than 100,000 shares now account for 4 percent of all shares traded.

Upswing: Block Volume Spikes

That's a significant increase over 2008, when the percentage of 100,000-share trades dropped to as low as 2 percent of volume. Credit Suisse attributes the decline in 2008 to the "extreme uncertainty of the period, which made it riskier to move such large positions at once."

The last time block trades accounted for 4 percent of all volume was in early 2008. Despite the uptick, some trading executives contend the figures are misleading.

They hold that the surge reflects trading in a small group of low-priced stocks such as Citicorp and Sirius XM Radio. They argue that there is no broad-based resurgence of block trading under way. Indeed, during 2009, there were days when only a handful of stocks accounted for upward of one-third of industry volume.

"There's no quantum leap forward in block trading," said Wally Sullivan, an executive with Pulse Trading. In January, on average, there were 1,200 prints of 100,000 shares or more.

 

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