In the cryptocurrency market, over-the-counter (OTC) trading platforms are gradually becoming a force that cannot be ignored. These platforms provide large traders with a more private and flexible trading environment.
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What is a block trade?
A block trade, also known as a block trade, is a large-scale, privately negotiated securities transaction. To avoid having a negative impact on public securities market prices, block trades are not conducted in the open market. "Block trading" services are generally provided by brokers to institutional investors.
Each exchange has clear definitions of block trades, and they vary. The New York Stock Exchange and Nasdaq define block trades as stock trades involving at least 10,000 shares or worth more than $200,000.
Prices privately negotiated by institutional investors in large trades can serve as an important reference when valuing a stock for other investors or analysts. The price of large transactions can be said to be the price that major shareholders are willing to accept, ignoring the impact of small transactions on prices.
The case for block trades
For example, hedge fund Y owns 100,000 shares of Company X and wants to sell all of them at the current market price of $13. Company X, on the other hand, has a relatively small market capitalization of nearly $8 million.
If Hedge Fund Y places an order on the open market, the trade could significantly depress the market price. Because the transaction volume is large enough to significantly affect the supply and demand of Company X's stock, it will quickly push down the trading price of the stock.
To avoid this, Hedge Fund Y can arrange a block trade with another investor (usually also an institution) who is willing to purchase all 100,000 shares of Company X.
Generally speaking, block trades benefit both parties: the seller obtains a transaction price that is more attractive than placing an order in the open market, while the buyer can negotiate a transaction price that is at a certain discount to the market price.
Importance of Block Trading Platforms
1. Privacy
The high-volume trading platform allows users to trade without disclosing transaction information, which is crucial for high-volume traders who want to keep their transactions private.
2. Minimize price impact
Conducting large transactions on the open market can have a significant impact on market prices. The OTC platform can reduce this impact by privately matching buyers and sellers.
3. Flexibility
Bulk trading platforms often provide more flexible trading terms, such as customized prices and trading volumes, to meet the needs of specific traders.
4. Professional services
Many bulk trading platforms provide professional customer services, including market analysis, trading strategy advice, and fund management.
5. Security
Bulk trading platforms are often equipped with high-level security measures to protect user funds and information.
Author: Zhihu user
Based on the characteristics of commodity trading, how to use industrial Internet thinking to build a B2B commodity supply chain service platform?
What can the commodity supply chain service platform do?
In view of these specific characteristics and pain points of bulk commodity transactions, we use the combination of futures and cash transactions as the means of transaction, with logistics, finance, and consulting services as the core pillars, and on the basis of establishing a credible performance guarantee system. Develop a bulk commodity supply chain service platform that serves the entire industry chain.
So when it comes to the services of our PaaS platform, we now provide six specific services:
First, personalized online transactions on the bulk commodity supply chain platform.
Trading services based on the combination of futures and cash, based on the characteristics of the bulk commodity platform that the quotation is relatively flexible, fast, and standard, and the characteristics of the settlement that are relatively personalized, have been combined to enable rapid price locking and pricing. , and can carry out various personalized deliveries, including the setting of premiums and discounts for personalized quality attributes, the selection of delivery locations, etc. This is our transaction model that is different from the previous standard B2B e-commerce supply chain system.
Second, bulk commodity system electronic signature service.
There are many service providers providing electronic signature services on the market now, and their products are also very mature. In contrast, the most important feature of [ShuShang Cloud]'s electronic signature service is that it deeply integrates technical means and business, not only for contracts entered into online, but also for various documents and settlements in the delivery process. We have put all the orders and logistics delivery documents online. Through electronic signatures and real-name authentication, we can solve the legal validity issues of contracts entered into online and also solve problems such as tampering and forgery.
Third, large-amount fund settlement services in the bulk commodity supply chain system.
In view of the fund settlement characteristics of online commodity trading platforms, we provide large-amount fund settlement services. Our services are mainly realized through the bank's multi-level account system. On the premise of meeting the compliance requirements of the People's Bank of China for fund management, we achieve convenient and real-time fund settlement, which can be done 7×24 hours Real-time, large-amount, real-time fund settlement, including cross-bank transactions in different places, including bank receipts, can be achieved. The transaction fees are also very cheap compared with third-party payment.
In addition, this large-amount fund settlement service is not only for B2B bulk commodity trading platforms, but also for chain service industries. Large-amount fund settlement PaaS services can also be used to supervise, freeze, and clear funds acquired by offline franchise stores. Divide and transfer to help the chain service industry create a new franchise business model.
Fourth, bulk transaction supply chain logistics service platform.
Bulk transaction supply chain logistics services are fourth-party logistics services positioned on the industrial Internet platform, because most of the industrial Internet platforms are not a specific fleet, but a shipping company or a freight forwarder, and they are not a real logistics company. As a service provider, its logistics services are more integrated with industry business resources. The bulk commodity trading or transshipment business we mentioned above or the bulk supply chain platform service business are pushed to third-party logistics companies and third-party supply chain logistics service platforms through the bulk trading platform, and they complete the services.
In addition, we have also connected with many third-party logistics service organizations, including quality inspection companies, tally companies, insurance companies, and operation service providers, who provide specific logistics services to customers on the platform.
Of course, our logistics services also provide visual full-process logistics and visual monitoring, which can help us better implement the management and control of cargo rights, and then provide subsequent supply chain financial services. These are all our bulk transaction logistics platforms. The service functions provided.
Fifth, a bulk transaction supply chain financial service platform.
There are many models of supply chain finance, including physical pledges, accounts receivable, bills, financial leases, etc. Different supply chain finance models, including different funding parties, will have different business processes and risk control measures, so the services in this area are more customized implementations.
The core thing is to connect the asset side and the capital side. This means that the financial side can better monitor the assets of entities through our platform and ensure the authenticity of assets and data. We bring all offline assets online through basic services, such as real-name authentication, electronic signatures, online transactions and settlements, full logistics control and warehousing mentioned above, and ensure the authenticity of assets through our PaaS platform and controllability, so that when assets are pushed to the capital side, it can better help the capital side manage risks and better provide financial services for the real industry. This is the basic logic of our commodity supply chain financial services.
Sixth, commodity trading blockchain.
Everyone is relatively clear about some basic logical principles of blockchain, which cannot be tampered with, can be split, and can be transferred, and the product features are relatively clear. But how can blockchain products be used in our industrial Internet, especially the services of bulk commodity platforms? For financial parties, the core requirement is how to ensure that the original data before being uploaded to the chain is true and controllable.
We ensure the authenticity of industry data through a PaaS platform mentioned above on the Industrial Internet. With real industrial data, the blockchain can actually be regarded as a special and more secure database. The real data on the chain can be digitized through blockchain technology, especially if some digitization is programmed. The bills, through the electronic commercial bills of the blockchain, digitize the assets, and then they can be circulated in the industrial chain, and can be transferred from the core enterprise to a series of suppliers in the supply chain of the superior bulk transaction system.
Overall, the block trading platform provides a more professional, secure and efficient trading environment for participants in the cryptocurrency market. As the cryptocurrency market continues to mature, we can expect these platforms to play an even more important role in the future.
