A discounted transaction refers to a transaction where the price is lower than the market value of the asset. In the stock market, a discounted transaction typically refers to bulk trades where the stock price is lower than the market price. Discounted transactions often occur when the seller needs to sell the stocks quickly or when there is insufficient market demand. In such cases, the seller may accept a discounted price to quickly obtain funds. For the buyer, a discounted transaction can be an opportunity to acquire more stocks.
The reason for a discount in trading is that institutional investors or large shareholders may want to sell a large amount of stocks to cash out. In order to stabilize the stock price and ensure their own profits, they may choose to conduct discounted trades through bulk trading channels. For example, if Citadel Securities wants to sell a batch of stocks with a market price of $100, and they have already made a profit of 2-3 times, they may offer a discounted price of $80 to other institutional investors through private negotiations. After the transaction is completed, Citadel Securities receives cash at the price of $80, while the other institutional investors acquire stocks with a market value of $100 at the price of $80.
Discounted trading is similar to transfer, but discounted trading involves directly entrusting other reputable institutional investors to conduct the trade, while discounted trading only requires the preparation of funds to purchase the allocated shares at a specific time.These transactions are directly executed on the market, just like many stocks that open high and hit the limit up. Although they may not be available for purchase, there is still trading volume. A specific number of shares are directly traded through bulk trading channels at a specific time. For example, if the current market price of a stock is $100, and it is expected to remain at $100 tomorrow, you can place an order in advance for the allocated shares at a price of $80. In the end, you will be able to purchase the $100 stock at the price of $80.
These types of transactions are pre-arranged when institutional investors want to sell a large amount of stocks. They find reputable institutional investors to underwrite the stocks. However, to avoid the possibility of control caused by direct purchase by institutional investors, they only have the underwriting rights without the purchasing rights. These shares will be distributed to individual investors with good relationships with the respective brokerage firms. For example, Citadel Securities distributes them to Citadel users. Since there are many Citadel users, it is necessary to make reservations in advance, and members who are in line for underwriting discounted stocks will prepare funds for purchase.
