Scribd
Upload
60 views1 page

Understanding the Over-The-Counter Market

This document discusses the characteristics of over-the-counter foreign exchange markets. It notes that over-the-counter trading occurs through unregulated bank transactions by telex and telephone. Regulatory authorities examine bank activities in these markets. Some organized exchanges exist where currency futures and options are traded, but most foreign exchange occurs over-the-counter with leverage, counterparty, and operational risks.

Uploaded by

Khánh Linh Mai Trần
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
60 views1 page

Understanding the Over-The-Counter Market

This document discusses the characteristics of over-the-counter foreign exchange markets. It notes that over-the-counter trading occurs through unregulated bank transactions by telex and telephone. Regulatory authorities examine bank activities in these markets. Some organized exchanges exist where currency futures and options are traded, but most foreign exchange occurs over-the-counter with leverage, counterparty, and operational risks.

Uploaded by

Khánh Linh Mai Trần
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Characteristic # 7.

“Over-The-Counter” Market
• High unregulated market initiating over the counter trade by the banks through
telex and telephone.
• Regulatory authorities examine the foreign exchange market activities of banks
and certain other institutions participating
• On the “organized exchanges,” foreign exchange products traded are currency
futures and certain currency options.
Disadvantages of Foreign Exchange Market:
• Leverage Risks
• Counterparty Risks
• Operational Risks

You might also like