Why a forward contract is called an OTC contract?

Bhavna Mehta, New Delhi

Because a forward contract is strictly bilateral without being routed through an exchange. It is therefore over the counter (OTC) in nature, that is, between two persons sitting across the table.

S. MURLIDHARAN

ASK! Send in your queries to ask@thehindu.co.in

http://MentorQA.blogspot.com

(This article was published in the Business Line print edition dated April 5, 2010)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.