21 January 2010
Bulk deal Vs. Block deal Exchange provides a separate window for block deals. Bulk deals happen from normal trading windows that brokers provide. There is only 35 minutes time window for block deals. Bulk deals can happen at any time during the trading hours. Usually there will be one or none block deals in a day. There will be many bulk deals in a day. A block deal should be a delivery trade i.e. the delivery of securities happens at T+2 days where as bulk deals are usually ‘day trades’ i.e. buy and sell on same day. Block deals are associated with a minimum quantity of five lakh shares or a minimum value of Rs 5 crore. A transaction is a bulk deal if the total traded quantity exceeds 0.5% of the number of equity shares of a company. What if the number of shares traded satisfies the quantitative definition of both bulk and block deals? For e.g. A transaction of 5, 75,000 shares (more than 0.5% of total shares) of a company whose total number of shares are 11, 00, 00,000. In this case if the transactions are traded by a separate trade window and are done on delivery basis they go into the list of block deals. If the transaction is a day trade it goes to the list of bulk deals. Usually we see transactions involving above 5, 00,000 shares under bulk deals section as day trades. The orders in a block deal are not shown to the people who trade from normal trade window. Bulk orders are visible to every one. Usually, in a block deal, the trade happens between two agreed parties. It happens when one party would like to buy or sell to other party at an agreed price between them. Bulk deals are market driven.
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