Over the counter (OTC)
Many transactions are done privately between counter parties and with no exchange involved.These are known as over the counter, or OTC.
Deals in any security can be done in two ways. One is via a regulated public market such as the London Stock Exchange. But many transactions are done privately between counter parties and with no exchange involved. These are known as over the counter, or OTC.
OTC deals have a number of advantages for each party, including the fact that details of the trade are not published. Furthermore, in many markets OTC deals are subject to less regulatory scrutiny as they are not generally open to the investing public.
However, OTC deals also have their critics, who complain that the existence of 'dark pools of liquidity' large deals being done regularly off-exchange exclude private investors from the best trades.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
See Tim Bennett's video tutorial: What is an index?
-
4 tax tips for the Bank of Mum and Dad before the end of the tax year
Parents and grandparents wishing to gift money in a tax-efficient way need to be aware of the looming 5 April end-of-tax year deadline. Here are our tips to beat the deadline.
By Ruth Emery Published
-
What can we expect from the NS&I British Savings Bond?
NS&I’s new British Savings Bond will launch next month. What will it look like, what sort of interest rate could it pay, and how will it compare to the rest of the savings market?
By Vaishali Varu Published