OTC Options

DEFINITION of 'OTC Options'

Exotic options traded on the over-the-counter market, where participants can choose the characteristics of the options traded.

BREAKING DOWN 'OTC Options'

The flexibility of these options is attractive to many. With OTC options, both hedgers and speculators can benefit from avoiding the restrictions that normal standardized exchanges place on options. The flexibility allows participants to achieve their desired position more precisely and cost effectively.

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