OTC Markets

February 9th, 2010 by admin

OTC Markets: In the over the counter markets there are several layers for a small trader to peel off to be able to get the same price an institution or hedge fund might get.

In the futures markets there is a central counter party doing all the clearing which takes off the credit issue right away off the table. This is the biggest advantage available to the small trader as they will get the same price a large fund or institution will pay for the same currency.

In the OTC markets you have the flexibility of trading an odd amount which you cannot do in the futures markets as they have fixed size contracts that trade on the exchange. To overcome this issue the CME has different size contracts available to traders.

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Posted in Futures Trading, Investing, Investing Trading, Markets
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