OTC Desk
A service that facilitates large crypto trades privately and directly between two parties, outside a public exchange's order book.
An over-the-counter (OTC) desk facilitates large crypto trades privately and directly between two parties, negotiated outside a public exchange's order book, generally used specifically for trade sizes large enough that executing through a public order book would cause significant price impact (see Kaavon's "Price Impact" glossary definition).
Because an OTC trade doesn't interact with a public order book at all, it has no direct effect on the publicly visible market price at the moment of execution, even though the trade itself may be very large — a meaningful difference from sweeping through a public order book's visible liquidity.
Examples
- A large institutional buyer might use an OTC desk specifically to avoid the significant price impact that executing the same trade through a public order book would cause.
- An OTC trade doesn't directly move a public order book's visible price at the moment of execution, unlike a comparably large trade executed on an exchange.