Why Large Trades Are Important

Traders and investors generally pay attention to large trades because they are often made by big money players who often may know more than the average retail investor. Some orders of big investors/funds can take a while to fill and many of those orders may include big block trades that we show. Buying from the take-a-while-to-fill orders can affect a stock’s price action for days if they are big enough. Knowing where the largest trades are in a given day can help traders understand potential support and resistance and short term trends.

With that being the case, it is important to realize that the largest trades can be gamed. Many institutions break their big block orders into hundreds of smaller pieces of 100’s to obfuscate their orders. Other institutions might intentionally make a big trade to show bullishness and hedge some other way and ultimately go the opposite direction. Given these dynamics, we believe it is prudent for every investor to use fundamentals and risk management.