OTC Market

It is a parallel counter market, over-the-counter (OTC) market or unorganized market as contracts. It is one where financial instruments (stocks, bonds, commodities, swaps or credit derivatives) directly between two parties negotiate. This type of trading is performed outside the scope of organized markets.

The term trading market or OTC (Over The Counter) can be used for contracts on financial instruments directly between two parties and also for trading in derivative financial instruments traded through a dealer, not through a centralized market.

For example, a futures contract that is traded on the futures market while a forward contract is an OTC product standardized product.