Overview
Over-the-counter (OTC) trading is direct, off-exchange trading between two parties, often for large orders. It avoids market impact and slippage. OTC desks serve institutions and large holders.
How It Works
Buyers and sellers negotiate a price directly, and the trade settles bilaterally or via a broker. OTC trades are private and can be large. This minimizes market disruption.
Why It Matters
OTC trading is essential for large transactions that would move public order books. It provides liquidity and discretion. It is a significant share of crypto volume.
Related Concepts
OTC Trading relates to Exchanges, Liquidity, and Institutional clients. It enables Large block trades.