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Over-the-Counter (OTC)
Financial transactions transacted off-exchange between counterparties or involving an intermediary bank, dealer or broker are referred to as over the counter, or OTC, transactions. OTC transactions lack the standardisation of listed futures or options contracts as available on derivatives exchanges and they carry counterparty risk (unlike listed transactions that have the exchange in the middle) but they offer the possibility for counterparties to trade in bespoke sizes and structures.