Trading OTC Markets with Quotex | A Brief Guide

One appeal of binary options is their experimental nature, with features like OTC or over-the-counter trading. Quotex is among the brokers that offer this option for clients. Here are the key facts about OTC trading on the former:

• OTC (over-the-counter) in binary options is a simulated version of a real market which is tradable 24/7. 
• Quotex provides OTC across forex, crypto, commodities and shares.
• While OTC offers more opportunities and better payouts, it’s less transparent and is more volatile. 

Let’s now dive deeper into this topic.

What is the OTC Market on Quotex?

Firstly, let’s define what over-the-counter is. Technically, OTC refers to trading different financial markets between two parties without a centralized exchange. However, the context is different with binary options on platforms like Quotex.

Generally, the prices of any traded asset on a binary options platform come from a real market. Meanwhile, the value for that asset will be different and artificially created among the participants in an OTC setting.

The main allure of OTC markets are that they are available on weekends when the regular markets are closed.

So, OTC binary options are almost the same as other binary options:

• They have a particular strike price, expiration date and time.
• They are derived from several popular assets.

The main difference is that they are synthetic versions of real markets. Furthermore, you can trade OTC binary options around the clock.

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Facts About OTC Trading on Quotex

Quotex provides OTC trading across the following markets:

You can view these OTC markets on a demo and live account with Quotex. 

How to Trade OTC On Quotex

Most of the trading products on Quotex are OTC by default. So, it’s quite simple to get started. Here are the steps to access these markets:

1. First, log in to your Quotex account or sign up.
2. Navigate to and click on the plus tab or sign near the top left corner of your screen. This will bring up all the available assets segmented across forex, crypto, commodities, and stocks.
3. You can see whether a market is OTC by looking next to its name. The OTC ones have ‘OTC’ in brackets.
4. Clicking on the asset will bring up its chart. The right-hand side of your screen has the necessary parameters to execute a position.

Pros of OTC Trading

The most significant benefit of OTC trading is the ability to trade on weekends, when most markets (except for cryptocurrencies) are inactive. It’s perfect for those busy during the week and, hence, have less time to be on the charts. 

However, it’s an avenue for more trading opportunities, bringing us to the second advantage of OTC. Yet, quantity doesn’t always correlate with quality. The best traders know that frequent trading will seldomly boost your profits. Rather, it’s about how good each opportunity is.

Another perk is that brokers provide slightly better payout rates for OTC markets to compensate for the risk involved.

Cons of OTC Trading

Sadly, OTC trading presents considerable risks. The first is the lack of transparency around the pricing for each market. Quotex doesn’t offer any insights on how the values are derived, so there is a chance for manipulation.

Generally, most assume binary options brokers use complex algorithmic calculations for OTC in binary options. Meanwhile, prices from non-OTC assets are driven by real supply and demand or market forces. While some OTC markets closely mirror their real-life counterparts, this is a minority.

Another issue is that fewer traders participate in the OTC markets, leading to more volatile prices. Volatility occurs in situations where there is too much trading activity and also when it’s too thin (which is the case with OTC). Such a trait is typical of the exotic markets Quotex offers with pairs like BRL/USD, INR/USD and ARS/USD. We should expect slightly erratic behavior with fewer participants in any traded security. 

Conclusion

In conclusion, OTC trading offers more downsides than upsides. Hence, we at Binaryoptions.com recommend normal trading instead of the former. 

Although OTC offers unique opportunities with unlimited hours, the absence of transparency is a deal-breaker. So, it’s high risk and is something that only expert traders should attempt. While OTC is customizable in other non-binary products, this flexibility doesn’t exist with the likes of Quotex since they control the entire process.

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