“Over-the-Counter or OTC trading platform is a part of the secondary market that involves a custom and private transaction with the other party.”
Financial markets are complex organizations with their own economic structures. Over the years it has played an important role in determining the price of an asset or service for traders.
There are two basic ways to organize financial markets – exchange and over-the-counter (OTC) and, in the last few years, OTC trading is one of the most rapidly expanding markets in the financial world. It is now influencing every aspect of finance including securities, real estate, bonds, commodities, cryptocurrencies, and much more.
In this article, we'll explain how the OTC trading platform works, what are its features, and how it can benefit you in the long run.
What are OTC trading and OTC trading platforms?
The financial markets are made up of complex structures, but broadly, there are two main ways to trade: exchange and OTC (over-the-counter) platforms.
Exchanges are markets where, it acts as middlemen where both buyers and sellers post the price at which they are ready to buy and sell assets, respectively. And when supply and demand are met, trade happens. Whereas, the OTC market is a less formal environment that operates outside of exchange supervision. In the OTC market, dealers act as market makers by posting their quotes as sellers to customers or other dealers. Companies that trade on the OTC market are considered public but are not listed. It implies that their stock is freely available for purchase and sale, but it is not listed on any major mainstream exchanges. The platforms which perform this OTC trading are called OTC trading platforms.
What are the benefits of OTC trading?
Because OTC trading occurs without being listed on an exchange, it helps to promote equity in the financial market. It also provides financial instruments that would otherwise be inaccessible to investors.
Low transaction fees: High transaction costs in mainstream exchanges will significantly reduce your returns and have a significant impact on your portfolio. Fees for OTC trading are lower when compared to some other mainstream exchanges which will help y in your portfolio.
Lower price: OTC trading has a relatively lower price, which can affect the volume of your favorite share. A lower price also means that your money goes further and buys more of an OTC investment.
Private and customized service: As you're dealing with an individual broker-dealer and the seller, rather than a large, anonymous market space, OTC trading ensures a truly meaningful private and customized service experience that will increase your long-term success.
What are the Features of the OTC Trading platform?
OTC trading platforms provide a reliable and transparent investment system to traders that reduce documentation by applying full automation. It also streamlines settlements and clearing processes to make trade easy.
Some of the features of OTC trading platforms include:
One-on-one service- the trading is done directly between two parties in which buying and selling happen through a network of dealers. This part focuses on the UI/UX for the OTC front end. It provides the functionality of quote queries, and capabilities to pass, accept, or counter quotes. It supports features of agreeing and locking the transaction, basic reporting, and logging transaction history such as quotes, agreed price, paid interest, participants, and so on.
KYC automation- this part includes a fully digital and automated process for initial investor onboarding as well as recurring AML checks.
Security- This includes a proper mechanism to protect the data from unauthorized access, and all security precautions should be considered.
Market insight- It ought to offer a useful bit of knowledge gathered from research or data analysis.
Other than that, OTC trading platforms also provide a space for small and startup companies to expand alongside large corporations.
What does Webmob offer for complete OTC trading Platform development?
Webmob software solution is the leading blockchain platform development company that not only understands every detail of your project but also focuses on your convenience in your development journey. Some of the advantages of working with us are:
Domain understanding: As a pioneer in the blockchain ecosystem and with a working experience of 8+ years, Webmob has a thorough understanding of the environment in which OTC trading platforms operate. We have an extensive experience team that has designed numerous domain-oriented platforms with a solid plan.
Delivery speed: We at Webmob have seasoned and certified experts who are well-versed in advanced technology and the proper set of rules that ensure the quickest project delivery within the time frame specified.
Compliance: We ensure that your OTC trading platform is compatible with all other devices. We guarantee platform-specific rules and configure and deploy your software in accordance with those rules. We have successfully delivered many fully compliant projects thanks to our wonderful team.
Security and Reliability: we understand that your project's top priority is security and reliability and we guarantee complete security and reliability so that any user can put their trust in your system.
OTC is one of the fundamental components of the financial market and it gives the market more flexibility so that traders can modify their derivatives to better fit their portfolios. With the advent of technology, the importance of OTC applications is always going up. And getting into the OTC trading platform provides numerous advantages to your company.
If you desire to employ OTC trading platforms to upgrade your trading stack? You are at the right place. With working experience on a wide range of OTC trading platforms for the last 7+ years, Webmob Software Solutions offer cutting-edge solutions that cover every aspect of OTC trading platforms.
We are always available to help you at any stage of your development journey, from niche selection to final deployment.
Hurry up and get in touch with us for more information.