What are these block deals? How does it happen? How is it different from bulk deal?
Letís see.

What is block deal?

According to Securities and Exchange Board of India (SEBI) a block deal is a single transaction of a minimum quantity of five lakh shares or a minimum value of Rs 5 crore and is done between two parties through a separate window of the stock exchange that is open for only 35 minutes in the beginning of the trading hours.

SEBI has also made it mandatory for the stock brokers to disclose on a daily basis the block deals made through Data Upload Software (DUS).

Difference between block deal and bulk deal

Block Deal

A block deal happens through a separate window that is open for only 35 minutes in the beginning of the trading hours at the stock exchange.

Bulk Deal
Bulk deals happen all through the trading day.
Another major difference is that a bulk deal is said to have happened if under a single client code and in a single or multiple transactions more than 0.5 per cent of a company's number of equity shares is traded.

Also, bulk deals are market driven while two parties are required for a block deal to take place. Bulk deals carried out for the day should be revealed by a broker on the same day to the stock exchange using the DUS.
Who can go for these deals?
Generally, only the institutional players including the foreign institutional investors are the major participants in this type of deals. This also includes mutual funds, the various financial institutions, and companies carrying out insurance business, banks, and venture capitalists. Sometimes, many promoters use this window to arrange the issues that are related to cross holdings.

Statutory requirements that must be followed for block deals
SEBI has rules in place certain rules for carrying out block deals. It is mandatory that block deals should happen only through a separate window and for a period of 35 minutes only in the beginning of the trading hours. Also SEBI rules state that block deal orders should be placed for a price not exceeding +1 per cent to -1 per cent of the previous day's closing or the current market price.

Delivery must be made for every trade executed and cannot be squared off or reversed. All details like the name of the scrip, the client's name, number of shares and traded price should be disclosed to the public through the DUS every day after market hours.
Interpretation of such deals
Investors often rely upon the block and bulk deals and their movements for trading cues. However, this might not be completely true. A block or bulk deal in a particular scrip doesn't necessarily mean that the stock price of the specific stock will increase as there are buyers and sellers involved in every deal.

Understanding the profiles of the institutions involved in the deal and their strategies is required.

However in case of bulk deals happening on a continuous basis in a counter or share with high volumes and high pending shares it could be a sign of appreciation in price in the future. Yet this could also happen in an operator driven counters.

So the block or bulk deals can be considered only as a first level of investigation and an investor before investing in a share should look for more details like specific information about the company like its fundamentals, its performance and ranking in its industry, and its future plans and prospects.
About Block and Bulk Deal
Welcome to Indian Share Market
www.DayTradingShares.com
buy stock,buy back shares,buy and sell,best buy stocks,buy or sell sugar stocks,buy sell,online stock,buying selling,shares to buy,purchase,sell share,buy back,in India,prices,back,trading,buying,how to online prices,sharemarket sugar companies industries,news sugar industries shares tips,trading,how to invest in,investment in,learn share market price rates
investment,financial investment,companies,finance,funds,market,investment online services,return on investment,best,bond,bonds,corporate,bse India,bse live,market,bse trading,high return,high yield,advice,growth,information,opportunities,securities,strategy,long term trading,shares,stocks,stock market,bse sensex,value,delivery based trade,delivery based trading,delivery trade,delivery trading,short term,mid term,how to invest,investing,how to make money,internet business,financial planning,online business,nifty,nse India,nse live,online money making profit,investing online,make money on internet,quick,margin trading,opportunity,fund,program,nse trading,sensex,nifty,nse market
Your Desire to Earn
Disclaimer: Information presented on this site is a guide only. It may not necessarily be correct and is not intended to be taken as financial advice nor has it been prepared with regard to the individual investment needs and objectives or financial situation of any particular person. Stock quotes are believed to be accurate and correctly dated, but www.daytradingshares.com does not warrant or guarantee their accuracy or date.
www.daytradingshares.com takes no responsibility for any investment decisions based on recommendations provided on website.
Financial contents like Technical charts, historical charts and quotes are taken from NSE and Yahoo sites.
Note - All quotes are delayed by 15 minutes and unless specified.

Google Adsense Ads are posted on every page of the website so visitors clicking on Ads and going to those links and carrying any financial deal is not at all related to www.daytradingshares.com and any financial deal should be done on their own sole responsibility.
Please read at
www.daytradingshares.com/disclaimer.php before using any material or advice given at www.daytradingshares.com
Copyright © 2012 DayTradingShares.com. All Rights Reserved
Stocks for Investment|Readers|Our Target|Demat Account Opening|Free Subscription|
Home|Free Technical Charts|Free Advice |Contact us|Suggestions/Complaints|