Source: Global Direct Access Network
One day soon you will be able to buy any publicly traded Korean security with just a few keystrokes.
What's more, you will do it in real time and for the same price as an investor in Seoul, 6,000 miles away. In turn, that Korean investor is already able to buy U.S. securities online, in real time, and for far less in transaction fees than by calling their broker.
The Global Direct Access Network (GDAN), developed by MidasTrade.com Inc. (Other OTC:MIDS.PK) - through MidasTrade's wholly owned broker/dealer, Midas Securities, LLC (member NASD and SIPC), based in Buena Park, Calif, has been serving Korean investors since 2002, allowing them to trade U.S. securities from their Korean homes. U.S. trading of Korean securities is expected to be up and running in the first quarter of 2006, and will make GDAN a two-way superhighway for investing. GDAN is a comprehensive data base and online trading platform that gives institutional and individual investors in the U.S. and Korea direct, real-time access to each others' home markets. This allows them to trade online stocks, bonds, futures and options and avoid the current time-consuming and costly placing of orders by telephone or facsimile.
MidasTrade has signed an agreement with the Korea Securities Computer Corporation (KOSCOM) to install software that will allow customers of MidasTrade to buy and sell Korean securities directly over the Internet and allow customers of KOSCOM's member securities firms to buy and sell securities on U.S. exchanges. All trades, inbound and outbound, will funnel through MidasTrade's proprietary GDAN, and MidasTrade will earn a fee on each order as the execution broker.
MidasTrade first launched GDAN in South Korea in 2002 and since has introduced a third generation version. "Our technology has been proved in everyday trading by customers of three of Korea's Big Five brokerage firms, who use it to buy and sell securities in Korea," says Jay Lee, president of MidasTrade.com. "The new agreement with KOSCOM will bring on board 13 smaller Korean firms and their customers.
"By early next year American investors will be trading directly into the Korean market," he continues. "Our GDAN system will virtually eliminate delays in order execution and confirmations and save investors a good deal of money."
Currently Korean traders pay a $50 or $60 "desk charge" to a U.S. broker/dealer plus a $100 custodial fee for each buy order. Lee says transaction fees under GDAN have not been determined yet but will be just a fraction of current costs.
About 28 percent of all stock trades on the Korea Stock Exchange are made by foreigners, and more than half of these are by Americans. In May - the latest month for which figures are available - foreign stock transactions totaled more than $20 billion.
"We expect U.S. hedge funds to be especially good candidates for GDAN," Lee says. "Fund managers value instant execution and confirmations, which are not now available for Korean securities."
"But the fact is that online trading with instant executions and confirmations will be good for all investors, both here in the U.S. and across the Pacific in South Korea."