DLRs are created when Inventory Providers place on the tZERO DLR platform either:
Short Sellers (Users) are able to view and purchase DLRs through multiple ways as outlined below:
The tZERO DLR platform matches Inventory Providers and Users who have placed Bids and Offers overnight. At 8:30 am Eastern Time, the tZERO DLR Platform matches corresponding bids and offers, and generates DLR purchase reports.
From 8:30 am to 8:00 pm Eastern Time, Inventory Providers and Users are able to post Bids and Offers in a transparent environment to purchase a DLR in real-time.
When Users purchase a DLR, they are then able to short the underlying stock up to the quantity of DLRs they’ve purchased for the day. The DLR confirm is sent to the Users’ front-end technology provider as well as their executing broker to ensure that the stock is able to be shorted in their system and that the executing broker is aware of the DLR.
Users holding overnight short positions can also utilize the tZERO Platform so that proper arrangements can be made to deliver stock on settlement date.
All DLR creations and purchases are registered to the blockchain creating a permanent order trail and accessible digital record.
Users accrue fees based on the DLR price and routing costs. Inventory Providers generate revenue based on the DLR price minus creation & routing costs.