Vol. 3, Issue 10, Part A (2017)

Abstract
Market efficiency means the security prices should reflect all the information. Block trading occurs when a large number of stocks are suddenly placed on the market for sale. This causes imbalances in the supply and demand in the market, as well as being perceived by the market as negative information. There are several empirical studies by Scholes (1972), Kraus and Stoll (1972), Grier and Albin (1973), Carey (1977) and Hess and Frost (1982), which investigated the effect of the sudden sale of a large number of stocks in the market. They found that there is a significant drop in price, but after a short period stock price rebounds to its prior level.