Block Trading
UBS is consistently chosen for our confidential advice, unrivalled distribution, strong capital provision and leading risk management capability.
Obtaining high quality execution for the largest trades has always been a challenge. Fund performance suffers and investment opportunities may be missed if liquidity cannot be obtained at a competitive price. The market impact of such large trades and potential information leakage over necessarily long periods of execution can be minimized and controlled by using UBS Block Trading services - a service that is increasingly used by our key clients due to their focus on transaction cost analysis (TCA).
Market impact
Analyzing one day's volume of a FTSE100 stock with UBS's award-winning pre-trade tool highlights an average market impact estimation of around 1.5%. When executing a UK midcap stock, this impact extends to 2%, with the most volatile stocks showing an impact of 8%. This 'line in the sand' can then be considered as a baseline when assessing the block trading opportunities and associated prices.
Confidential process
Every aspect of our Block Trading service is bound by utmost confidentiality. From initial discussions on the potential trade through to assessment of the various options all the way to execution, the tightest controls over the trade information are in place. This focus on confidentiality extends beyond trade execution, which ensures that any investment you continue to hold is fully protected.
Trade structures
From a block trade on risk with no distribution to an accelerated book build, UBS can offer a trade structure to suit your investment needs during all market conditions. We also take into account your ongoing needs such as residual holdings in our suggested approach. Further opportunities, such as reverse enquiries, underwriting and hybrid structures that ensure complete alignment of objectives, are assessed in conjunction with you.
Competitive pricing
Once the decision to trade has been made, a competitive price is critical. Our unparalleled knowledge of client trading patterns and extensive distribution capabilities give us an exceptional understanding of the placement price capabilities for your trade, which enables us to offer you an efficient trading strategy and the best possible price. Trade execution is always undertaken with one goal in mind - obtaining the best result for our clients. Post execution, the market impact of the trade is controlled, measured and assessed to ensure the next block trade you need to execute can again be traded confidentially, efficiently and at a price which matches your investment needs.