Cryptocurrency Q&A
What is an OTC counterparty?
What is an OTC counterparty?
Michele
Mon Sep 23 2024
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7 answers
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Could you please clarify what an OTC counterparty entails in the realm of cryptocurrency and finance? I understand that it involves transactions that occur outside of traditional exchanges, but I'm curious about the specific role of the counterparty in these transactions and how they differ from those on centralized platforms. Additionally, are there any risks or considerations one should be aware of when engaging with an OTC counterparty?
7 answers
Giulia
Tue Sep 24 2024
Due to the lack of centralized regulation and standardization, OTC derivatives are often subject to greater credit risk, as the counterparties must rely on each other's financial strength and creditworthiness.
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CryptoVisionary
Tue Sep 24 2024
An over-the-counter (OTC) derivative is a financial instrument that is traded directly between two parties, bypassing traditional exchanges and intermediaries.
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Lucia
Tue Sep 24 2024
Despite these risks, OTC derivatives are popular among financial institutions and corporations for hedging and speculative purposes.
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KDramaLegendaryStarlight
Tue Sep 24 2024
These derivatives are highly customized, as they are tailored to meet the specific needs and risk appetites of the counterparties involved.
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Valentina
Tue Sep 24 2024
One of the leading cryptocurrency exchanges, BTCC, offers a range of services that cater to the needs of both retail and institutional investors.
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