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  • Author: Nixon Kareem

Assessing Counterparty Risk in Over-the-Counter Trades

The global financial landscape relies heavily on Over-the-Counter (OTC) markets for trading derivatives, foreign exchange, and fixed-income products. Unlike exchange-traded contracts, which are standardized and cleared through a centralized clearinghouse, OTC trades are private agreements negotiated directly between two independent parties. This structural flexibility allows corporations and institutional investors to…