OTC Meaning (Over-the-Counter)

OTC, short for over-the-counter, means a trade agreed directly between two parties, usually through a dealer or broker, instead of on a central exchange. Forex is the largest OTC market.

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Last updated 29 October 2026

OTC stands for over-the-counter: a trade agreed directly between two parties, usually through a dealer or broker, instead of on a central exchange. There is no single order book that every trade passes through. Each dealer quotes its own bid and ask, and you trade on the price your broker shows you.

Forex is the biggest OTC market in the world, and the forex, gold and index CFDs you trade in MetaTrader 5 are agreed off exchange too.

Why is forex traded over the counter?

Forex has no central exchange: banks, dealers and brokers in every time zone quote prices to each other and to their clients, so trading runs around the clock. The Bank for International Settlements (BIS) counts $9.6 trillion of OTC foreign exchange turnover a day in April 2025.

The market follows the business day from Sydney to New York, and trading between dealers makes up 46% of that turnover. That depth is why major pairs such as EURUSD carry tight spreads. The brokers and liquidity providers lesson shows how those prices reach your platform.

Left, five dealers joined to each other in a web with no centre, labelled OTC; right, five traders all joined to one central order book, labelled exchange
OTC trades are agreed between dealers and their clients; an exchange routes every order through one central order book.

How is OTC different from an exchange?

On an exchange every order meets in one central order book with standard contracts; OTC prices are quoted by dealers and brokers, so contract sizes, hours and quotes are set by each provider. Forex and CFDs sit on the OTC side, while shares and futures usually trade on an exchange. The table compares the two.

OTC (forex, CFDs) Exchange (shares, futures)
Where the price comes from Your broker's bid and ask, built from its liquidity providers One central order book
Trading hours Forex runs 24 hours on weekdays The exchange's session
Contract size Set by the broker, down to 0.01 lot Fixed by the exchange
Who you trade with Your broker Another exchange member, through the exchange

Because each provider quotes its own price, two brokers can show EURUSD a fraction of a pip apart at the same moment. Both are real prices; the gap is each provider's spread and liquidity.

Worked example: OTC on EURUSD

MetaTrader 5 shows EURUSD at 1.08500 bid and 1.08510 ask. You buy 0.10 lot, which is 10,000 euros, at the ask, and later close at the bid when it reaches 1.08760.

Step Calculation Result
Spread cost at entry (1.08510 − 1.08500) × 10,000 $1.00
Result on close (1.08760 − 1.08510) × 10,000 $25.00

You never meet the other side of the trade in an order book: the broker quotes, you click Buy, and the fill comes back at its ask. The bid and ask price page explains which side you pay.

How do you see OTC prices in MetaTrader 5?

In MetaTrader 5, OTC prices appear in Market Watch, where the Bid, Ask and Spread columns show your broker's own quote for each symbol. Market Watch shows Bid, Ask and Spread side by side, and the Specification window lists each symbol's contract size and trading sessions.

Depth of Market for OTC instruments may be built from the broker's quotes, so it shows that provider's book, not the whole market. Thin hours show up as a wider spread, which the liquidity in forex page covers.

What do traders often get wrong about OTC?

The common mistake is thinking OTC means there is no real market price, when the OTC forex market is the deepest market there is. It trades trillions of dollars a day. What OTC changes is how you reach it: through your broker's quote instead of an exchange order book.

Compare the Spread column across hours before you place a trade, and size orders to the volume shown.

Sources

Learn it properly in the full lesson: What Is a Broker in Forex? How Forex Brokers Work

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