What are OTC derivatives?
Could you please explain what OTC derivatives are in a concise manner? I'm interested in understanding their basic characteristics and functions within the financial market. Are they similar to other types of derivatives traded on exchanges? Also, could you elaborate on the risks associated with OTC derivatives and how investors can manage them effectively? Finally, how does the pricing of OTC derivatives differ from that of exchange-traded derivatives? Thank you for your clarification.
Who clears OTC derivatives?
Could you please clarify who is responsible for clearing OTC derivatives? It seems like a complex process that requires expertise in the field of finance and derivatives trading. Are there specific institutions or regulatory bodies that oversee this process? I'm curious to know more about the mechanisms and procedures involved in OTC derivative clearing. Could you elaborate on the role of these entities and how they ensure the smooth and secure operation of the OTC derivatives market?