Block future

A block future is a large futures transaction that is privately negotiated away from the main electronic order book but reported under exchange block-trading rules. Energy trading firms, refiners, producers, and funds use block futures when they need to move significant size without causing visible price disruption or revealing their intentions to the wider market. For example, a refiner might use a block future to hedge several cargoes or a refinery margin exposure in one go, rather than dripping orders into the screen and pushing the market. Block futures can be simple outright positions or structured as calendar spreads, crack spreads, or other combinations. Once agreed bilaterally, they are reported to the exchange within a specified time frame to maintain transparency and regulatory compliance. For traders, block futures reduce slippage, execution risk, and signalling risk when repositioning books, especially in less liquid contracts. Understanding when and how to use block futures is an important part of execution strategy and risk transfer in the energy derivatives space.