OTC stands for “Over-The-Counter” trading. These are essentially private deals conducted between the trader and the service provider (or “desk”). There are two major advantages afforded to OTC traders:
- Since these transactions are not conducted on a regular exchange platform, there is no public order book, giving the participants greater privacy.
- Traders can buy large amounts of crypto without suffering from slippage. (More on this in a bit.)
VirgoCX Wealth offers direct market access for cryptocurrencies with optimal price execution. The OTC service bridges the gap between traditional finance and cryptocurrencies by giving our clients access to a deep pool of crypto and fiat currencies to fill large orders at the desired market price.
The Mechanics Behind Crypto OTC Trading
OTC training is a bespoke service by design and is often done by institutions that want to maintain a large inventory of cryptocurrencies to meet projected demands. This is how the trade works:
- The two parties directly connect with each other.
- One of the parties is the “desk” – a dedicated business that buys and sells a particular asset class.
- The two parties agree upon a price and conduct the transactions between themselves.
- The desk procures the crypto or fiat required to complete the transaction at transaction time.
As you can imagine, OTC trading takes a lot of trust on both sides of the equation. As a result, you are better off using an OTC desk with a proven track record of exceptional service (like VirgoCX Wealth).
Why Do Cryptocurrency Traders Prefer OTC?
If you are a high net-worth individual or an institution you would prefer OTC trading due to two main reasons.
#1 Avoiding Slippage
Slippage is the difference between where the system locked the entry and exit of the trade and where the actual clients entered and exited the trade. One of the most common ways slippage works is via abrupt changes in bid/ask spread.
Let’s take an example.
Let’s say the bid/ask price of token A is $520.50/$520.55 on the broker side. You want to place an order for 100 tokens at this price, but the microtransactions clocked by the system lift the bid/ask to $520.54/$520.59, with the original order being fulfilled at $520.57. So, for a 100 token trade, you suffered a negative slippage of $4.
OTCs allow you to avoid slippage by trading large volumes of tokens in one go.
#2 Trade Low Liquidity Assets
If you are not trading the popular coins, the chances are that you will fall into the low liquidity trap. When you suddenly trade a massive amount of low liquidity tokens, you will have an enormous impact on the market, causing volatility swings. OTC trading can help mitigate this as well.
VirgoCX Wealth Services
VirgoCX Wealth is a full-service trading desk for large blocks of crypto and fiat transactions over $30,000. The target clients for VirgoCX’s Wealth services are:
- Institutions: VirgoCX’s digital system and chat brokerage options allow institutions to access the market efficiently and make fast and flexible settlements.
- Trading Firms: Proprietary trading firms can use the OTC service to efficiently hedge risk using highly liquid USDC/CAD on/off ramps.
- Miners: Crypto mining firms can use VirgoCX Wealth’s fiat ramp and rapid settlements to pay bills and other expenses.
- High Net-Worth (HNW) Individuals: HNW clients may purchase cryptocurrencies from VirgoCX Wealth Managers or use OTC Direct. They may also get a bird’s eye view of the market via VirgoCX market commentary.
VirgoCX Trading Products
VirgoCX Wealth has two OTC trading products:
- OTC Direct: The product allows institutional clients to execute large block trades simultaneously.
- OTC Chat Broker: This is our bespoke service that caters to our client’s specific needs. Our OTC trade team will facilitate any trade requests you will have for your business.
Conclusion – Why VirgoCX Wealth?
As we wrap things up, let’s do a quick overview of the various reasons why you should use VirgoCX Wealth’s OTC services:
- Save up on execution costs by eliminating slippage on large trades, save up as much as 2% compared to other platforms.
- There are no hidden trading costs. What you see is what you get.
- Get the best prices for trading BTC, ETH, USDC, and more in the Canadian market via our liquidity pools.
- Get access to multiple foreign currencies.
- Get personalized services catered to your specific requirements 24X7.
- Enjoy rapid, same-day settlement.
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