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Over-the-counter, over the top

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Uploaded by on Nov 10, 2008

Credit default swaps have worsened market anxiety because they are conducted in the over-the-counter market, where regulations are few and information about risk is often hidden. Marketplace Senior Editor Paddy Hirsch explains.

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  • @stupidaznmunkey Thanks for the reply;-) I haven't logged on youtube for over a year. Now I finally managed to get pass the great fire wall here in China! Whew! I've read the book Wall Street, The Economist series. It helps a lot!

  • This may work with gala apples or fuji apples, but don't try it with gravenstein (grave stone) apples. It may turn out to be the last apple you ever eat.

  • theres more flexibility in exchanges - NASDAQ is an OTC market

    most of the difference between an OTC and say the NYSE, is there is no actual floor, no specialist (which makes money move), an OTC is pretty much buyer and seller - no middleman to make ends meet

    and your penny-stocks can be found @ OTC markets :)

    and on the flip side, for those who are smaller sized businesses, its WAYYY cheaper to IPO in OTC markets than it is to get listed on the NYSE - thats another thing :)

  • to put things in a really general sense, you can't trade bonds on the exchanges.

  • well, I think that this is because on exchanges securities are standardized and it is quite diffcult to find a product which suits your strategy or market views. thanks to OTC you can discuss the terms and conditions of a specific deal including things like: notional amount, maturity and the payout pattern. so it is mainly about meeting the requirements of the client. you can both just decide whatever you want and don't need to strict rules set by the exchange.

  • I guess you can get better deals there.. Not sure though

  • Thanks! But I don't understand why people would choose OTC over exchanges, given that it's so opaque and unregulated? What are the merits of OTC dealings? Thank you!

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