These refer to Derivative contracts that are traded off exchange or Over The Counter (OTC), but cleared and settled through a Central Counterparty like an exchange or clearing house. Some examples of commonly traded OTC derivative contracts are:
• Bulk Commodities – Iron Ore & Coal • Energy – Fuel Oil, Gas Oil & Naphtha • Freight – Forward Freight Agreements (FFAs)
Benefits of Clearing
The Central Counterparty, as a middleman assumes all contractual rights and responsibilities. This encourages greater confidence and familiarity through the standardisation of contracts.
Simplicity is maintained with Central Counterparty being both buyer and seller, this helps to reduce buyer/seller credit risk.
There is price transparency as positions are marked to market and cash settled against settlemen prices determined by the Central Counterparty.
Better price opportunities can be expected in a wider market place.
Why Trade OTC Derivatives with Phillip Futures?
Multi exchange clearing memberships
Access to electronic trading to complement OTC clearing
Intraday risk monitoring
Trade OTC Derivatives with Phillip Futures
To view the OTC Derivatives Product Information Sheet, click here.
For more information on OTC trading, please give us a call at (65) 6531 1526 / (65) 6531 1531 or send us an email at firstname.lastname@example.org.