Over-the-Counter Option

Over-the-Counter Option

An option traded off-exchange, as opposed to a listed stock option. The OTC option has a direct link between buyer and seller, has no secondary market, and has no standardization of striking prices and expiration dates. See also Secondary Market.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

OTC Options

Option contracts that are not traded on an exchange. Because they are over-the-counter, OTC options are not standardized contracts and, as a result, can have any number of unusual features. This allows investors more flexibility, but creates additional risk. See also: Exotic option.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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