Buying say over Rs 100 crores of say a midcap stock on the normal exchange platform is nearly impossible. These deals typically happen between 2 or more parties, people who own large quantity of the stock and those who want to buy it. There are essentially institutional brokerages who know which institution/HNI owns how much stock. So if they get an investor who gives an intent to buy say Rs 100 crores of stock X, they reach out to all the big guys who own it and find out if they'd be interested to sell.
If the seller is ready, they get on the exchange bulk or block deal platform and execute this trade. Check this to know more about bulk or block deal.
Dear sir @nithin , i have a question about this bulk deal.
- Is transaction cost for bulk deals lower than regular trades?
- Can parties do intraday trades in bulk trade?
if not then pls see below image ,
the data says that, 4 firms have performed intraday trade in ZEEL (on 14 sep 2021), RJ & BOFA SEC made investment so they should used to do bulk deal. but other four firms traded (intraday) for only 0.12 to 0.83 points with big qty.
My 3rd que is that, why they didn’t used nse cash or nse FO segment for intraday? what might be the reasons? liquidity issue or MWPL limit rule in F&O?
any new details are welcomed , & will raise our knowledge.
Thanks in advance.
- Same transaction costs.
- Yeah they can.
- Bulk deals are executed to reduce impact costs. If you trade on the exchange there potentially can be an impact cost.
Thanks for reply, & clearing my doubts.
one point raised in my mind, & also said somewhere in TQA forum, is that why exchanges don’t disclose the names & type of position (long/short) of F&O traders who’s OI is more than said limit (e.g. 5%).
Data in this image shows that some one has taken position in F&O in ZEEL on 9th Sep which is about 5.35. exchange data shows group number & position %, but don’t disclose name & type of position , either long or short.
it would be better if SEBI instruct exchanges to disclose the identity & position types, it will to help decode the signal of trend in stock movement.
Thanks once again sir.
Do you have any plans to provide brokerage service to institutional Investors or HNI to acquire share in large quantities ?