Trading equities and securities in the financial market is big business. The knowledge of understanding trade, when to buy low and sell high, or simply buy and hold for the benefits offered such as ownership and dividend is a very lucrative business.
Yet, most people are not able to tap into this highly profitable market. Even with understanding and strong financial knowledge, hundreds of thousands of people cannot trade, or only trade in smaller valued securities because they do not have the required capital to take part in security trading.
Issues of Existing Trade Market
Even as the financial world is adopting the latest technology to improve the trading activities, it is still largely an industry that follows age-old protocols and rules. This results in a lot of inefficiencies that are outdated and create more hindrance than actual use:
- High Transaction Costs: Small investors pay $25 and more per transaction, while institutional traders pay at least 0.15% of the total transaction amount.
- Slow Settlement: Even with the new improved rules and regulations, it still takes 2 days as a minimum.
- Bloated Staff: With much of the work being done manually, institutional investors and brokerages need large number of employees with relative costs ultimately passed down to clients.
- Extensive Paperwork: A huge amount of paperwork is needed to open a brokerage account, initiate and settle a transaction.
- Floatation Cost: It costs a lot to list a new equity.
- Voting: An expensive process where physical arrangements have to be made for voters, their catering and the administrative cost of voting itself.
Trading securities market, although very profitable, can be a nightmare for some and makes it difficult for new entrants to achieve their goals.
CDRX: Securities Market Made Accessible
CDRX is a platform that aims to make the securities market much more accessible. Using the tested and proven model of cryptocurrency exchanges, the platform will apply its benefits to trading securities.
Cryptocurrencies are subject to widely different regulatory interpretations. In some places, they are accepted as a medium of exchange, while some countries declare them otherwise. Some states even banned cryptos altogether. CDRX, however, plans to operate in complete compliance of relevant regulations and facilitate the trading and listing of securitized and non-securitized digital instruments.
The platform makes trading easy by offering:
- Low Transaction Costs: With no brokers and middlemen to ask for commissions, users will pay only transaction confirmation cost.
- Near Instant Settlements: With blockchain, the transactions are settled in real time.
- Low Administrative And Staffing Cost: With most of the work being carried through automated Smart Contracts, there will be less need of human involvement, further making the process easier and cheaper.
- Floatation Cost: As issuers trade equities directly to traders, the flotation cost will be reduced nearly to zero.
- Voting: Through Smart Contracts and tokenized voting, shareholders can take part in it from the comfort of their homes.
- Dividends: Smart contracts ensure that dividends are paid out automatically to the shareholders through digital tokens, meaning less paperwork and banking delays and faster execution.
CDRs: Trading By Small Investors
Small investors sometimes do not have the budget to get into the big securities game. They may know that an investment in a top class security offered by a company is the best option in terms of trading or long-term holdings for dividends, but is unable to buy the shares because they are already very high in value. Google, for example, is trading its class A shares at around USD 1200.
For a small investor like an individual, 1200 dollars for a single share is a lot of money. He or she may not be in a situation to even buy or trade one single share of a company like Google. CDRX has a solution. Crypto Depository Receipts are instruments issued via a custodian bank or trust, and each CDR represents ownership of the underlying equity. Since CDRs are divisible, they allow fractional ownership, which is one of the biggest benefits of this product, allowing investors to get a slice of the pie without having to shell out the total amount for high-value shares.
CDXR trading platform and CDRs are making the USD 600 trillion securities market trading as easy as going online and buying or selling bitcoin and you can learn more about them on their official website.