A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
OTC
(Difference between revisions)
|
|
| Line 1: |
Line 1: |
| - | Abbreviation for Over The Counter. A market conducted directly between dealers and principals via a telephone and computer network rather than via an [[Exchange|exchange]]. Unlike an exchange there is no automatic disclosure of the price of deals to other market participants and deals and traded instruments are not standardised. | + | Abbreviation for Over The Counter. An OTC market or trade is one conducted directly between dealers and principals via a telephone and computer network rather than via an [[Exchange|exchange]]. Unlike an exchange there is no automatic disclosure of the price of deals to other market participants and deals and traded instruments are not standardised. Most OTC trades are not A clearing house steps in when a party to a trade defaults, ensuring that a transaction is completed. Most OTC trades are not cleared, exposing firms – and the financial system – to so-called “counterparty risk” such as default. |
Revision as of 07:17, 20 July 2009
Abbreviation for Over The Counter. An OTC market or trade is one conducted directly between dealers and principals via a telephone and computer network rather than via an exchange. Unlike an exchange there is no automatic disclosure of the price of deals to other market participants and deals and traded instruments are not standardised. Most OTC trades are not A clearing house steps in when a party to a trade defaults, ensuring that a transaction is completed. Most OTC trades are not cleared, exposing firms – and the financial system – to so-called “counterparty risk” such as default.