Over the counter forex trading

Contents

  1. Page Navigation
  2. What does OTC mean?
  3. OTC definition
  4. OTC Forex Brokers List: Top 10 Best OTC Brokers ( Update)

Before online forex trading provided access to currency trading for individuals, a number of smaller speculators traded currency futures on a limited number of currency pairs on exchanges. To learn more about the forex market, we recommend this useful infographic on the subject.

Page Navigation

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you. The sections below will cover the primary means of trading in the forex market.

What does OTC mean?

The OTC market also includes customers of these financial institutions, who often include major corporations, hedge funds, central banks, and high net worth individuals whose usual transaction These clients usually deal over the telephone by contacting the customer dealing desk of the bank. Online Forex Trading The relatively recent rise of the Internet has provided an opportunity for forex brokers to provide pricing on a variety of liquid currency pairs electronically to individual customers who wish to deal forex in smaller amounts of usually less than one million U.

The following are forex-related definitions that you should familiarise yourself with when trading online:. It may also be helpful to learn the nicknames of the popular foreign exchange pairs. As mentioned above, all Major Currency Pairs or Majors are traded against the USD, and are generally regarded as the most popular currency pairs to trade. When choosing a currency pair to trade, you should test your strategy either with a popular FX pair, or with your local currency against the USD, on our free, unlimited Demo Account.


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Be cautious and diligent in your trades, and open small trades initially to carefully observe how the market is performing over time. Our user friendly yet advanced online CFD platform includes a free demo account, a wide variety of educational resources and trading tools that are made available to new and experienced traders alike. Our spreads are among the lowest in the industry and the intuitive platform is designed for ease of use, without compromising on in-depth analytical insights and sophisticated trading options.

This article contains general information which doesn't take into account your personal circumstances.

OTC definition

Plus uses cookies to improve your browsing experience. You can click accept or continue browsing to consent to cookies usage. Over-the-counter derivatives OTC derivatives are securities that are normally traded through a dealer network rather than a centralised exchange, such as the London Stock Exchange.

Forex as an Over-the-Counter (OTC) Market

This lack of a central exchange means that the parties to an OTC transaction are exposed to higher counterparty risk. The value of an OTC derivative is determined by the value of its underlying asset, which can include bonds, stocks, commodities or currencies foreign exchange. Prior to the global financial crisis, the OTC derivatives market was unregulated.

What is over-the-counter trading?

This legislation is designed to limit the threat of default in the OTC derivatives market and therefore reduce the risk of another financial crisis. Currency forward contracts are one of the most common examples of OTC derivatives.


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They are a common tool used by international companies to protect their profit margins from exchange rate volatility. Like other OTCs, forward contracts are not traded through a centralised exchange and the settlement details are therefore agreed between the buyer and the seller.

OTC Forex Brokers List: Top 10 Best OTC Brokers ( Update)

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