OTCderivater
OTCderivater refers to over-the-counter derivatives, a class of financial contracts whose value derives from underlying assets, rates, or indices and that are traded directly between two counterparties rather than on standard exchanges. Common instruments include interest rate swaps, currency swaps, forward rate agreements, credit default swaps, and certain foreign exchange options. The defining feature of OTCderivater is customization: parties tailor notional amounts, maturities, payment dates, and contingency provisions to meet specific hedging or investment needs, which is often not possible with exchange-traded contracts.
Market participants for OTCderivater include large banks, corporations, asset managers, and hedge funds. They are used
Regulation of OTCderivater intensified after the global financial crisis. A substantial portion of standardized contracts is
Overall, OTCderivater provide flexible risk management and investment tools while presenting heightened counterparty, liquidity, and operational