The reduction of block trading is a way between the reduction of centralized bidding in the secondary market and the reduction of agreement transfer. Although major shareholders reduce their holdings through block trading, they will not directly sell off and sell off the market share price trend like the centralized bidding reduction in the secondary market. However, the reduction through block trading means that the shareholders who reduce their holdings are not optimistic about the subsequent development of listed companies or the overvaluation of listed companies at this stage, which may lead to investment panic and negative impact after the release of block trading reduction information.
The way to reduce the holdings of block trades is mainly to allow some major shareholders of listed companies to transfer and reduce some shares through block trades and agreements, so that the secondary market is not adversely affected by the reduction. However, the stocks reduced by these large-scale transactions will eventually flow into the secondary market. Therefore, no matter how the major shareholders reduce their holdings, it will have a certain negative impact on the shares of listed companies.
Block trading is also called block trading. Generally speaking, it refers to the transaction scale, including the number and amount of transactions, which is very large, far exceeding the average transaction scale of the market. Specifically, each exchange has a clear definition of block trade in its trading system or in its commodity trading system, and they are different. Block trading is aimed at a large number of securities transactions. According to China's current trading system, if a single securities transaction reaches a certain amount, the stock exchange can trade in the form of block trading.
Block trading shall be conducted within the time limit of the normal trading day of the exchange. Block trading of securities with price limit should be within the price limit of the day, and block trading of securities without price limit should be within 30% of the previous closing price within the bidding time of the day or between the highest and lowest trading prices. The transaction price is determined through negotiation between the buyer and the seller and confirmed by the stock exchange. According to the regulations, the stock exchange can adjust the minimum amount of block trades according to market conditions.
Reduction is a special term in the stock market and futures market, which reduces the number of stocks or futures indicators held. Non-tradable shares can be circulated and then thrown out for cash, which is called reduction.