The basic definition of an over-the-counter (OTC) derivative is a bespoke, private derivatives contract that is negotiated directly between counterparties rather than being traded on an exchange. It sounds simple enough, but the reality is rather more complex. Read on for a closer look at some of the fundamentals of OTC derivatives. Why trade over-the-counter? […]

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July 21, 2010, marked the signing into law of the Dodd-Frank Wall Street Reform and Consumer Protection Act — the most comprehensive piece of financial legislation since the Great Depression. Of particular interest to many individuals and entities worldwide was Title VII of Dodd-Frank (as the Act quickly became known), which addressed critical gaps in […]

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As recent years have shown us, the adoption of appropriate risk management processes is a vital part of maintaining a healthy derivatives market. And for all derivatives market participants—from major financial institutions to first-time individual investors—the crucial first step of an effective risk management strategy is simply understanding the different types of risk associated with […]

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All derivatives contracts derive their value from the price of one or more underlying assets. But while a huge range of instruments can be used as underlying, the majority of derivatives products tend to be based on five broad underlying asset classes. Read on for a closer look at the different classes and examples of […]

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Although derivatives themselves are highly varied — they can be easily sorted into four basic types, but a huge range of sub-types exists within each of those groups — when it comes to trading, derivatives can typically be bought and sold in one of only two ways: on a listed exchange, or over-the-counter. Read on […]

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