In block deals minimum transaction quantity of shares should 5 lakhs or minimum price should be Rs.5 crore. this type of deals always happened between two parties when both parties agree to buy or sell securities at an agreed price and tell the same to stock exchange.
Block deals always execute in a single translation on separate trading window so will not show to those peoples who trade in normal trading window. this window called ‘block deal window’. block deal window opened only for 35 minutes in the morning of trading hours from 9:15 am to 9:50 am. Every block deals trade has to result in delivery.
As per the rule set by security exchange board of India (SEBI) trade price of script should vary from -1.0% to +1.0% of current market price or previous day closing price and SEBI also set the rule for the stock brokers to disclose the block deals on the daily basis made thought the Data upload software.
Stock exchanges should show the information about the block deals to public on the same day after the marketing hours with the information like client name, script name, number of quantity of shares to trade and trade price.
Bulk deals is a trade where total quantity of shares sold or bought is more than 0.5% of the total number of equity shares of a listed company.
Bulk deals order always visible to everyone because bulk deals always execute from the normal trade window provided by the stock broker during the marketing hours.
As per the SEBI rule stock brokers, who facilitates the trade, is mandatory to tell to stock exchange about the bulk deals translation when they happened. If bulk deals happened in single transaction then that case stock brokers should tell to stock exchange immediately or if bulk deals happen in multiple transaction then that case stock brokers should tell to exchange within one hour to closure of trading.
Who participants in bulk and block deals:
Percentage of money and shares in bulk and block deals are very high, retail investor can’t take part in such type of transaction. Mostly, mutual funds, foreign institutions, financial institutions, insurance companies, banks investors take part in suck kind of trades.