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Introduction

Principal Market Maker

OTC Precious Metals

Forward Agreements

 



OTC Markets

The Over-The-Counter (OTC) Market for physical commodities and precious metals represent some of the most liquid markets in existence today.   Billions of dollars of physical commodities including precious metals change hands daily in the OTC Market.

The OTC Market is a highly capitalized, decentralized market where trading occurs on a dealer-to-dealer or principal-to-principal basis and trades are settled directly between the principals. Each OTC transaction is a unique and non-fungible trade with each element negotiated between the principals.

Trading can occur in "Spot" commodities or precious metals or for deferred delivery through a Negotiated Forward Agreement. In a "Spot" transaction settlement of the trade (the exchange of the physical commodity or precious metal verus currency — usually U.S. Dollars) occurs 2 business days after the Trade Date. In a Forward Agreement, trade settlement occurs on the Deferred Delivery Date agreed to between the parties.

Settlement of physical commodities or precious metals can be made via a plant, terminal or depository delivery or by delivery to a mutually agreed upon location.








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