Block Trading Facility - BTF

A block trading facility (BTF) is not actually a building, but a specialized brokerage company where traders buy or sell a large number of securities outside of the markets open to the public. Oooh. Exclusive.

Large, institutional investors such as retirement funds, universities, banks, or insurance companies looking for a quick sale at a certain price might use a BTF for big lots (not the bulk discount store) of a stock. The BTF traders then hit the phones looking for other brokers who might specialize in this type of stock to help sell the shares “en masse,” or in as large lot sizes as possible. This way, there will be little or no effect on prices or volumes in the public stock market...almost like a private handshake between a buyer and seller. It can even be a secret handshake, if you're willing to put that much work into it.

Let’s say GargantuBank USA wants to unload 20,000 shares of Giggle, Inc. at $15 per share, so they contact Sell Today Block Trading Facility. Sell Today traders might break up the lot into smaller ones of 4,000 shares, and each one of the smaller lots will be sold through a separate broker. The effect on the general market should be minimized, while the “big guys” can do their thing.