OTC (Over-The-Counter) refers to trading that occurs directly between two parties without the supervision of an exchange.
Key features:
- Direct trading between parties
- Usually for large transactions
- Customized terms possible
- Less transparent than exchange trading
- Often used for:
- Large block trades
- Illiquid assets
- Institutional trading
- Cryptocurrency deals
Characteristics:
- Higher minimum trade sizes
- Personalized service
- Price negotiation
- Private transactions
- Different pricing than exchanges
Benefits include more privacy, potential better pricing for large orders, and ability to handle significant volume without affecting market prices, though with less transparency than exchange-based trading.