OTC Market Flashcards
0
Q
Traders in the OTC Market
A
Normally large financial institutions and treasurers of large corporations.
They do not physically meet.
1
Q
Market Makers
A
Financial Institutions in the OTC market often act as Market Makers by quoting ask and bid prices.
2
Q
The OTC Market
A
Telephone and computer based network of dealers.
Most of derivative trading takes place on the OTC market not on exchanges.
3
Q
Exchanges
A
Although trades can often be done electronically, exchanges still have a physical location.
4
Q
Most common contracts on the OTC market
A
Contracts on interest rates and foreign currency!
- Interest rate swaps
- Forward rate agreements
- Interest rate options
- Foreign exchange forwards
*It can be notes that on exchanges options are significantly more common than futures
