“
Options and forwards are traded on all kinds of financial instruments, including stocks, bonds, and various market indices. Some are traded on organized exchanges throughout the world. Others are traded only in privately negotiated transactions, called over-the-counter, or OTC. Exchange-traded derivatives are more highly regulated, more liquid, and more dependable than OTC derivatives. To get information about an exchange-traded derivative, you can simply look in the Wall Street Journal or call a broker. In contrast, you might never be able to discover certain information about an OTC derivative unless you worked in the derivatives group at an investment bank.
”
”