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What is OTC trading?
OTC, or over-the-counter, trading is buying or selling directly between two parties, or through a dealer, instead of on an exchange's public order book. In crypto it is often used for large trades that would move the price if placed on an exchange.
What it means for you
An OTC price is negotiated rather than shown on a public book, so you rely on the quote you are given and have less to compare it with. The other party is a risk: if they fail to deliver, there may be no exchange process to fall back on. Check who holds the money and the coins between agreement and settlement.
How it works
The CFTC describes over-the-counter trading as trading of instruments not listed on any exchange, done electronically or by telephone, also called off-exchange trading. Such deals are negotiated bilaterally, so each side carries counterparty risk, the risk that the other defaults; exchange-traded futures, by contrast, are guaranteed against default by a clearing organization. A related practice is the block trade: a large transaction negotiated away from an exchange's central trading facility and then executed on it, as exchange rules permit.
Source: CFTC Glossary · checked 4 October 2026
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