Over-the-counter option often just OTC option (so also said in German)

Option that is neither securitized nor tradable on the stock exchange (an option which is traded in the over-the-counter market, is not listed on an options exchange and does not have standardized terms). Corresponding contracts are negotiated over the counter between the writer and the buyer via telecommunications systems. Their cancellation (offsetting) before the expiration date requires a corresponding counter transaction between the same parties (as opposed to a listed stock option, the OTC option has a straight link between buyer and seller, has no secondary market, and has no standardization of striking prices and expiration dates. OTC transactions take place in general electronically or over the telephone). – OTC options with precious metals and currencies as underlying are sometimes also publicly offered as standard products. In addition, there are specially created options for individual investors (tailor-made OTC options). The Bank for International Settlements conducts and publishes surveys on the volume of transactions – until now every three years. The European Market Infrastructure Regulation (EMIR), which came into force in August 2012, introduced a reporting requirement for such transactions. – See settlement department, derivatives, option, commercial, options, tradable, warrants, over-the-counter trading, European Market Infrastructure Regulation, certificate tailor. – See BaFin Annual Report 2005, p, 14 f. (lack of clarity regarding risk), BaFin Annual Report 2007, p, 126 f. (backlog rates in OTC derivatives), Financial Stability Report 2011, p, 43 f. (intransparency of OTC trading in general and of over-the-counter derivatives markets in particular), Financial Stability Report 2012, p, 92 ff. (intransparent over-the-counter derivatives market poses risks).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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