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OTC

SASyed Ahsan Ali5y ago
What is OTC instrument and transaction and is it true that they cannot be traded in the market?
John MoffatJohn MoffatTutor5y ago#1
As I explain in my free lectures, over-the-counter transactions are arrangements made individually with the bank. They cannot be traded - it is only traded instruments (such as traded options) that can be bought and sold in the market.
SASyed Ahsan Ali5y ago#2
Over-the-counter trading is done directly between two parties such as two companies without the supervision of a stock exchange. In other words, It is a trading mechanism where securities of unlisted companies are traded between brokers or dealers without the supervision of a formal exchange. (Is that correct?) Can you please tell me how many among these following derivatives are traded instruments & those which are OTC instruments that cannot be traded: 1) Currency Futures 2) Options 3) Currency Swaps 4) forward rate agreements 5) interest rate guarantees 6) interest rate futures 7) interest rate options How to know which ones are the OTC (non-traded instruments) from the above?
John MoffatJohn MoffatTutor5y ago#3
Currency futures and interest rate futures are traded instruments. For currency and interest rate options, there are traded options but also they can be arranged as OTC options. The others are not traded instruments.
John MoffatJohn MoffatTutor5y ago#4
Currency futures and interest rate futures are traded instruments. For currency and interest rate options, there are traded options but also they can be arranged as OTC options. The others are not traded instruments.
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