What does 'block trading' allow investors to do?

Block trading permits investors to execute large orders outside the open market, which is essential for minimizing market impact. When a trader wants to buy or sell a significant quantity of a commodity, doing so directly on the open market could lead to unwanted price fluctuations due to the sheer volume of the order. By utilizing block trading, these substantial trades can be negotiated in a manner that keeps the transaction discreet, ensuring that the order does not adversely affect the market price of the commodity involved. This method is particularly valuable to institutional investors who aim to maintain their trading strategy's integrity and limit the visibility of their trading activities.

The other options do not accurately describe the primary function of block trading and its benefits. For instance, executing small orders at market rates or trading solely on the open market does not align with block trading's goal of mitigating market impact. Additionally, while trading without a broker may appeal to some investors, it doesn't represent the essence of block trading, which focuses primarily on large order executions.