BULK ORDERS and Institutional Investors - How do they do it?

General
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Hello Fellow traders,

A retail investor wants to know what happens behind those BULK orders that create spikes on the chart.

Referring to Institutional EQUITY Investors who place order for like 100,000 shares:

How do they do it?

  1. Do they use the same NEST, PI like trading terminals ?

  2. Assuming they have direct accounts with the NSE, do they have to pay any brokerage fees or special fees to the NSE?

  3. Do they have to inform the NSE in advance before placing such large orders?

  4. Do they place a LIMIT or MARKET order for such large QTY?

  5. On receiving the full order QTY, does the NSE servers execute the full order QTY all at once or in logical chunks to avoid spikes?

  6. Can they do a SHORT SELL and leave it open overnight, If YES, for how long, do they have to maintain margins ?

  7. Do they pay the same STT, SEBI charges , STAMP duty etc as a retail investor ?

  8. Looking through the NSE bulk deal records , I can find that the profit per share on these BULK orders that are closed on the same day are barely few paisa’s, what actually is going on?

  9. The leverage margin for a retail investor is overseen by the brokerage firm, For an Institutional Investor does the NSE regulate such margin on a Real time ?

  10. In India, Is NSE accountable by any statute or Law to safeguard the interest of Retail Investors, like actively monitoring trading data to look out for insider trading, tip sellers BULK order placement to spike price at specified time, etc etc?

Appreciate your interest and response, if you are just a reader hope this is something you would like to know too.

GOOD LUCK and happy trading,

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There is no difference to place huge orders to small orders provided it follows under the rules set by regulators.

There are restrictions on individual limits, stock limits, and at broker level.There are execution ranges and circuit limits to restrict cornering a stock. But all these can't stop from having intraday spikes.

Transaction charges, risk management, settlement etc are all same as normal trading.

As many quote in markets there is no best indicator other than price to follow up and act.

1 Like
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  1. Yep similar terminals. Typically bulk orders are executed by dealers who work at brokerage firms.

  2. The exchange transaction charges are same immaterial of if he is a retail or institutional client. So nothing changes. A brokerage firm might charge lesser or more based on the relationship.

  3. If it is block deal (value of Rs 5 crores or more) they have to share the details upfront with the exchange. All block deals can happen in a 35 minute window during morning trading. Block orders happen in a special window, so it won’t be visible to others.

    If it is a bulk deal (change of atleast 0.5% of equity shares) , it can be transacted in the normal trading window. Either through one trade or more number of trades. Bulk orders are visible to everyone.

  4. Limit

  5. Since they are at limits, execution is quite straight forward, especially in block deals (as only the two parties can transact).

  6. No

  7. Yep, everything same.

  8. There is no one doing intraday trading using bulk deals. So it doesn’t make sense to look at it like this.

  9. Rules of exchange is the same for retail and institutional.

  10. Absolutely, both the exchange and SEBI are constantly looking at all these data to spot insider trades an all.

3 Likes
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Very good question…I also want to know the answers to these questions. I hope if Nithin himself could answer these questions.

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Hi, Thanks for the response, Enlightening subject.