Are Swaps OTC?

1 Answer

  1. Yes Rayon, swaps are indeed OTC(over-the-counter). They are customized contracts traded in the over-the-counter market privately, versus options and futures traded on a public exchange. Basically, firms and financial institutions dominate the swaps market, with few individuals that rarely participating. Since, swaps occur on the OTC market, there is always the risk of a counter party defaulting on the swap.

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