Description of the Derivatives Markets-Cont’d Derivatives are traded on organised exchanges or in over-the-counter OTC) market. Derivatives contracts traded and privately negotiated directly between two parties belong to the OTC market. All contract terms, such as delivery quality, quantity, location, date, and price, are negotiable. The total value of derivative contracts outstanding in global OTC markets is substantially higher than the exchanges-traded amount. A trend is a provision of standard contracts, which makes it easier for more participants to access the OTC markets.
