OTC Data refers to transactional and pricing information derived from trades executed “Over-The-Counter,” which means directly between two parties outside of a centralized exchange environment. This dataset typically includes large block trades, customized derivative agreements, and other transactions not publicly listed on exchanges.
Mechanism
OTC data is primarily compiled from direct reporting by participating dealers, brokers, or institutional trading desks involved in bilateral transactions. Due to the private nature of OTC markets, this information generally exhibits less transparency and is aggregated with less frequency compared to data from exchange-traded markets. It necessitates specialized data collection and normalization processes for effective market analysis.
Methodology
For crypto investing and RFQ systems, utilizing OTC data provides a more comprehensive perspective on market liquidity and institutional trading activity, especially for large block trades that might significantly impact public exchange prices. The methodology involves aggregating data from various OTC desks and dark pools, then applying advanced analytics to infer true market depth, price discovery mechanisms, and institutional sentiment. This improves trade execution strategies and refines risk models within less transparent digital asset markets.
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