Over The Counter

Over The Counter (OTC), also known as off-exchange trading, is trading financial instruments such as stocks, bonds, or commodities directly between two parties. OTC contracts are bilateral contracts in which two parties agree on how a particular trade or agreement is to be settled in the future as opposed to exchange traded contracts, which take place in a location established for the purpose of trading such as commodity futures exchanges or stock exchanges. Forwards and swaps are main examples of such contracts.

Products traded by this method include iron ore swaps at the NYMEX; natural gas, electricity, crude oil and refined products, and iron ore at the ICE.