Glossary

OTC Desk

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An OTC Desks conducts over-the-counter (OTC) trades with its clients. Instead of matching buyers and sellers, the OTC Desk will act as a dealer for anybody looking to trade a given asset.

OTC Desks are generally used when a given trade would not be possible on exchanges. This could occur if the asset doesn’t trade on the exchange at all. Alternatively, if an order is large a trader may wish to conduct it with an OTC Desk to limit their market impact and slippage.

Related Terms
Liquidity
Liquidity is a measure of how easily an asset can be traded on financial markets. The depth of an order book is often cited as a measure of liquidity.
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Slippage
Slippage is financial loss during trading as a result of market inefficiencies and illiquidity. Slippage occurs when an illiquid market experiences a sudden, large change in demand or supply, resulting in losses for the buyer or seller.
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Volume
Volume is a measure of how much an asset is being traded on financial markets. Larger volumes tend to indicate greater liquidity in a market.
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Brokerage
A brokerage is a financial institution which allows its customers to buy and sell assets directly. Brokerages differ from exchanges in that brokerages serve as the counterparty to its users in all transactions.
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Exchange
An exchange is an institution which acts as a market-maker between parties who wish to buy and those who wish to sell. Exchanges simply facilitate trades between parties for a fee.
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