Trading

Over-the-Counter (OTC)

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Securities traded directly between counterparties

What is Over-the-Counter (OTC)?

Over-the-Counter (OTC) Securities traded directly between parties rather than on a public exchange. OTC options can have customized terms (any strike, expiration, or size) but lack the transparency, standardization, and central clearing of exchange-traded options. OTC options carry counterparty risk and are primarily used by institutions.

Complete Definition

Securities traded directly between parties rather than on a public exchange. OTC options can have customized terms (any strike, expiration, or size) but lack the transparency, standardization, and central clearing of exchange-traded options. OTC options carry counterparty risk and are primarily used by institutions.

Related Terms

Exchange Traded Flex Options Options Clearing Corporation

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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