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Glossary · Trading basics

OTC (over-the-counter)

Generally, trading outside an exchange; on Sky Trade, OTC instruments are priced by Sky Trade's server and do not follow any real market.

By Sky Trade editorial teamUpdated

In traditional finance, “over the counter” means a deal made directly between two parties rather than on a public exchange; much of the global forex market works this way.

On Sky Trade the label means something more specific, and it is worth being completely clear about it: OTC instruments are priced by Sky Trade's own server. The price comes from a random-walk model that ticks every 0.5 seconds, runs 24/7 including weekends, and does not follow any exchange, bank or real market of the same name. “BTC/USD OTC” does not track the real Bitcoin price, and INDEX 250 and ASIA 200 are synthetic indices.

The model is a martingale in the statistical sense: the direction of the next move is 50/50 and unpredictable, with no built-in drift against traders, while volatility changes slowly over time. Two consequences follow. News, sessions and economic data have no effect on OTC prices. And chart patterns or indicators have no special edge there: with payouts below 100%, a 50/50 path means a negative expected value.

Sky Trade lists 38 OTC instruments. Details in OTC explained and on the OTC markets page.

Example

On a Saturday the real forex market is closed, yet EUR/USD OTC keeps ticking every half-second. Those moves come from the server's model, not from any bank's quote.

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