Teeth of Financial Sharks: OTC Trading

Everyone who know about stock trading has long known that the more money you manage, the lower the average percentage of your profitability. In other words, it is more difficult to operate with a large deposit...

Everyone who know about stock trading has long known that the more money you manage, the lower the average percentage of your profitability. In other words, it is more difficult to operate with a large deposit than a small deposit. Just like driving a car: a passenger car is more agile than a bus.

This is due to both human psychology (the fear of losing money greatly reduces the efficiency of trade) and basic slippage which, when buying or selling large amounts, becomes a noticeable item in your costs. This is especially characteristic of the cryptocurrency market, where to this day there are many chaotic and abrupt movements. It has another unpleasant feature, namely the exposure to cyberattacks which regularly put at risk the work of crypto-investors.

Of course, not everyone is willing to put up with such a situation, therefore a number of large investors in both classical and cryptocurrency markets have found a solution in so-called OTC trading, or more simply, off-exchange trading. OTC-trading is the same as speculation on any currency or any other rates that by-passes a classical exchange. Such operations are carried out, as a rule, through various hedge funds and other financial organizations.

Despite the fact that this option is only available to very wealthy people, OTC-trading also impacts ordinary people since it affects the entire cryptocurrency market. Classic stock indicators show only the tip of the iceberg, while much of it is hidden from prying eyes.