Block House


DEFINITION of 'Block House'

A brokerage firm with the primary focus of locating potential buyers and sellers of large trades. A block house typically deals with institutional clients rather than individual investors, since each transaction represents millions of dollars. Examples of institutional clients include mutual funds and pension funds that assume significant security positions. Because of the nature of block house firms, their trading activity can have a considerable effect on the financial markets. Block trades are generally considered to be those dealing with more than 10,000 shares of stock (excluding penny stocks), or any other trade that involves a high monetary value.


A brokerage firm is a company that acts as an intermediary between buyers and sellers to facilitate transactions. The buyers and sellers must pay commissions and other transaction fees in exchange for the brokerage firm's assistance in executing any trades. A block house is a type of brokerage firm that deals primarily in large trades, with clients ranging from corporations and banks to insurance firms and academic funds. Some investors and analysts try to follow the money or stay ahead of market trends by watching block trade activity. Institutional investors sometimes trade large blocks of securities directly, to avoid brokerage commissions, in a practice called fourth market.

  1. Bagging the Street

    An investor's failure to avoid trading in the stocks that are ...
  2. Block Order

    A signficant order placed for sale or purchase of a large number ...
  3. Basket Trade

    An order to buy or sell a group of securities simultaneously. ...
  4. Institutional Investor

  5. Broker

  6. Block Trade

    An order or trade submitted for sale or purchase of a large quantity ...
Related Articles
  1. Fundamental Analysis

    Where's The Market Headed Now?

  2. Fundamental Analysis

    Introduction To Institutional Investing

  3. Fundamental Analysis

    Institutional Investors And Fundamentals: What's The Link?

  4. Brokers

    Uncovering The Securities Firm

  5. Options & Futures

    Brokers and Online Trading

  6. Investing Basics


  7. Mutual Funds & ETFs

    Can you invest in hedge funds?

    Read about what it takes to invest in a hedge fund, and learn how some investors find ways to indirectly capture a hedge fund's returns.
  8. Mutual Funds & ETFs

    What happens if you don't hedge your investments?

  9. Economics

    Gary Gordon Positions Your Portfolio For 2015

  10. Mutual Funds & ETFs

    What is standard deviation used for in mutual funds?

    See how standard deviation is helpful in evaluating a mutual fund's performance. Use it in combination with other measurements to find a good investment.

You May Also Like

Hot Definitions
  1. Commercial Paper

  2. Federal Funds Rate

  3. Fixed Asset

  4. Break-Even Analysis

  5. Key Performance Indicators - KPI

  6. Bank Guarantee

Trading Center