OTC derivatives

OTC derivatives
over-the-counter (OTC) derivative
USA
A derivative product not traded on any organized, regulated exchange. OTC derivatives are customized, bilateral, privately negotiated contracts, which, as a result, can be illiquid as compared to standardized exchange-traded derivatives. No exchange operates between, and essentially guarantees, the performance of the parties to an OTC derivative as is the case with exchange-traded derivatives. Examples of OTC derivatives include most credit derivatives, including credit default swaps (CDS), interest rate swaps and currency swaps.
See also

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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  • over-the-counter (OTC) derivatives — over the counter (OTC) derivative USA A derivative product not traded on any organized, regulated exchange. OTC derivatives are customized, bilateral, privately negotiated contracts, which, as a result, can be illiquid as compared to standardized …   Law dictionary

  • OTC derivative — over the counter (OTC) derivative USA A derivative product not traded on any organized, regulated exchange. OTC derivatives are customized, bilateral, privately negotiated contracts, which, as a result, can be illiquid as compared to standardized …   Law dictionary

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  • OTC — See: over the counter. The New York Times Financial Glossary over the counter (OTC) Purchases and sales of financial instruments that do not take place in organized exchanges such as the New York Stock Exchange or the Chicago Board of Trade are… …   Financial and business terms

  • derivatives — (1) Financial instruments whose value depends upon the values of underlying assets, interest rates, currency exchange rates, or indexes. Various authorities define derivative instruments in broad, inclusive terms or narrow, exclusive terms. It is …   Financial and business terms

  • Exchange-traded derivatives —   Derivatives which are traded on a futures or options exchange i.e. not OTC derivatives. The BIS estimated that the worlds banks had $3.5 trillion worth of exchange traded derivatives at the end of 1991 …   International financial encyclopaedia

  • over-the-counter derivatives — over the counter (OTC) derivative USA A derivative product not traded on any organized, regulated exchange. OTC derivatives are customized, bilateral, privately negotiated contracts, which, as a result, can be illiquid as compared to standardized …   Law dictionary

  • International Swaps and Derivatives Association — The International Swaps and Derivatives Association (ISDA) is a trade organization of participants in the market for over the counter derivatives. It is headquartered in New York, and has created a standardized contract (the ISDA Master Agreement …   Wikipedia

  • International Swaps and Derivatives Association — (International Swaps and Derivatives Association | ISDA) The global trade association representing participants in the privately negotiated derivatives industry. Related links structured finance …   Law dictionary

  • International Swaps and Derivatives Association, Inc. — International Swaps and Derivatives Association, Inc. (International Swaps and Derivatives Association | ISDA) The global trade association representing participants in the privately negotiated derivatives industry. Related links …   Law dictionary

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