OTCcontracten
OTCcontracten, also known as over-the-counter contracts, are financial agreements between two parties that are not traded on a centralized exchange like a stock market. Instead, these contracts are customized and negotiated directly between the buyer and seller. This direct negotiation allows for greater flexibility in tailoring the terms of the contract to the specific needs of the parties involved.
The nature of OTCcontracten means they are private agreements, and their terms are not publicly disclosed.
Common examples of OTCcontracten include forward contracts, swaps, and options. Forward contracts allow parties to agree
The absence of a central clearinghouse in many OTC markets means that there is counterparty risk, the