MemCast
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#algorithms2#economic-impact4#liquidity10
Large block trades force price moves by exhausting natural liquidity before market makers step in
  • In the 80s/90s, institutions split large orders into 25,000‑share blocks to avoid moving the market.
  • Even these blocks still “push the tape” and create a price move that statistical arbitrageurs can exploit.
  • Modern algorithmic execution (VWAP) breaks orders into thousands of small slices, but the cumulative effect is similar.
  • The price impact accelerates as more participants (including HFTs) react to the shifting order‑book.
Rishi NangTitans Of Tomorrow00:22:07

Supporting quotes

Quote
00:22:07
“If you need to buy a hundred thousand shares of something, you're not going to do that over the course of a thousand 100‑lot orders. So you go find someone to take on a big chunk... those are block trades.” — Rishi Nang
Quote
00:22:30
“Now, the tape moves and a whole industry spawned called statistical arbitrage. That wasn't an arbitrage at all. It was statistical right? It's probabilistic that, oh, if you see a big price move that doesn't seem explained... just bet that that price move will reverse.” — Rishi Nang

From this concept

Market Impact & Liquidity Mechanics

Nang details how large orders move prices, the role of VWAP algorithms, and why the "iceberg" effect creates self-reinforcing price moves.

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