OTC Desk: what it is and how it works

OTC transactions are particularly advantageous when it comes to large volumes, especially in the crypto market

The term OTC has a special meaning for exchanges and in the crypto market in general. Find out why and how to access Young Platform’s OTC Desk.

OTC: what is it?

The meaning of OTC is Over-the-Counter and refers to financial transactions that take place directly between the parties involved, outside a regulated or public market. These transactions are not executed on the market of an exchange, but take place privately between counterparties. OTC transactions commonly occur in the equity, bond, derivatives and currency markets.

In them, there are two parties involved: the buyer and the seller. These parties negotiate directly with each other or through intermediaries such as banks, dealers or brokers.

The parties agree on the terms of the transaction, including price, quantity, maturity date (if applicable) and other relevant terms. The negotiation may be conducted verbally, by telephone, by e-mail or through a dedicated platform.

Even if OTC transactions take place outside a regulated market, they are still subject to the general financial regulations in force in their country. 

The advantages of OTC in the crypto market

In the case of the crypto market, OTC trading has particular advantages. These mainly concern liquidity.

This type of service is often used by institutional investors, high-volume traders and individuals who wish to trade significant amounts of cryptocurrencies outside of the open exchange market. In general, we are talking about amounts over EUR 50,000.

Trading such figures on an exchange, in fact, can bring disadvantages to both the trader and the rest of the market participants.

Being a relatively illiquid market compared to financial instruments, large-volume transactions in crypto can create excessive volatility. These momentary price spikes could cause price slippage for other traders or even give false trend signals (bull traps).

Furthermore, there is usually not enough liquidity available on an exchange to fill a large order at a single price. In fact, in order to execute a large order, the exchange must take the bids (or asks) in the order book, in ascending order of price, and add them up to the desired amount. If the latter is excessive, the order may even be only partially executed, or it may not be allowed.

Young Platform’s OTC Desk

Young Platform’s OTC service is aimed at all investors or entrepreneurs who want to buy or sell large quantities of cryptocurrencies.

Our customers’ needs are not only for trading: we have business accounts that want to diversify their business liquidity, or convert large payments received into euros. A particular example of this might be a capital increase in cryptocurrencies. Since this has to be notarised in fiat, it needs to first be converted.

Our OTC Desk offers:

• Over 70 pairs, both crypto-fiat and crypto-crypto
• Transactions from €50,000 upwards, with no limit in amount
• 1-to-1 contact by telephone

How does an OTC transaction work?

• Contact the team by email;
• You will receive instructions on how to access the Desk;
• Our OTC Desk will propose a price and the hypothetical countervalue you will receive. The offer lasts for one minute, within which you can accept or decline and wait for a new proposal;
• As soon as you accept a price, the order will be set and the corresponding amount will be credited to your Young Platform account.

It is also possible to set up limit orders on demand and request support for transfers or other operations related to the main one.

Contact us now to execute an OTC transaction at [email protected]. 

The information in this article is for information purposes only and does not constitute an incentive to invest.