It would force the stock price down further. Due to this, the hedge would observe slippage on demand, and at the same, other participants would take advantage of the situation and short the market based on price action. Also, because the transaction size is large, one will execute the order at progressively worse prices. Now, if this enters as the single market order, it probably would lead to the a fall in the overall market price. The transaction involving the 4 million dollars on the company might be worth only some hundred million. Let us take an example of a hedge fund that wants to sell 200,000 shares of a small company having $20 as the current market price. Let us understand the concept with the help of some examples. Thus, generally, these trades are conducted through intermediaries rather than an investment bank or hedge funds purchasing securities normally because they normally do it for smaller amounts. The same can cause an impact on the market value of bonds or shares purchased. In that case, there will be large fluctuations in the transaction volume.
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