OTC Forex Brokers

Over-the-Counter or OTC Forex Brokers among the Forex market deals are the most common trading service providers. The execution model means that deals are conducted via the counter while the broker acts as a market maker for bid and ask prices when the client requests the order. The trading is made between two parties without the supervision of exchange, while stocks are passed via a dealer network. 

• The advances of OTC providers are their usual bonuses for deposits along with more smooth quotes at volatile conditions, comparing to the STP or NDD brokers, which is a great advantage to various trading strategies.
• The trading cost in OTC condition is a defined make-up –the spread, which is most commonly fixed and is a fantastic benefit to the traders performing long-term deals.
• Stocks are usually traded on OTC since the majority of trading brokers can’t get into the official exchange listing, due to the Stocks requirements on performance and necessity of high capitalization.

Among the OTC disadvantages are less transparency and regulation of this type of exchange, as trading itself is decentralized and done through improvements in the electronic quotation provided by the OTC broker. However, in order to have reliable trading, the OTC Brokers should be sharply regulated by the industry authorities, as this is the only factor that controls brokerage at all times of its operation. Otherwise, you will never know if you truly trade Stocks and other derivatives, or the broker just fakes its status, as unfortunately happening quite often among non-regulated providers.

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