A Block Trade is a privately negotiated futures, options or combination transaction that is permitted to be executed apart from the public auction market, among eligible contract participants.
Block trades are permitted in specified products and are subject to minimum transaction size requirements which vary according to the product, the type of transaction and the time of execution. Block trades may be executed at any time at a fair and reasonable price.
An entity, such as a financial institution, insurance company, or commodity pool, that is classified by the Commodity Exchange Act as an eligible participant based upon its regulated status or amount of assets.
This classification permits these persons to engage in transactions (such as trading on an execution facility) not generally available to non-eligible contract participants, i.e., retail customers.
Block Technology Rules
It shall not be permissible to facilitate the execution of block trades in Exchange-traded products on a system or facility accessible to multiple parties that allows for the electronic matching of or the electronic acceptance of bids and offers.
Parties may use communication technologies to bilaterally request block quotes from one or more participants and to conduct privately negotiated block trades.
Parties may also utilize technologies supported by third parties which allow for the electronic posting of indicative block markets displayed to multiple market participants.
However, block trades executed between parties on the basis of such electronically displayed indicative markets may be transacted only through direct bilateral communications involving the broker, where applicable, and the parties to the trade.
The Block Pool℠
- Electronic crossing platform for voice brokers. - Manage your own pool of anonymous liquidity. - One click submission to clearing house. - No hardware. Fully managed and supported.
Compliance and Disaster Recovery Services. - Indicative quoting. - Transaction logs and voice recording
"The ultimate cockpit for voice brokers" - CME Clearport Broker, 2013