Thank you for visiting The total notional amount of outstanding OTC contracts in 2018 was compared to exchange traded contracts which totaled in 2018 A 212 trillion 104 trillion. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
The total notional amount of outstanding OTC contracts was $544 trillion compared to exchange traded contracts which totaled $104 trillion.
What is the difference in notional amounts between OTC contracts and exchange traded contracts?
The notional amount refers to the total value of a financial contract, which represents the underlying assets or liabilities involved.
In this case, the outstanding OTC contracts have a total notional amount of $544 trillion, while the exchange traded contracts have a total notional amount of $104 trillion.
This means that there is a significant difference in the scale of these two types of contracts, with OTC contracts having a much higher value compared to exchange traded contracts.
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The total notional amount of outstanding OTC contracts was $544 trillion compared to exchange traded contracts which totaled $95 trillion.
Over-the-counter (OTC) contracts and exchange-traded contracts are two types of financial derivatives used by market participants. The notional amount of outstanding contracts refers to the total value of these contracts based on their underlying assets, without taking into account any potential gains or losses.
In this case, the total notional amount of outstanding OTC contracts was a staggering $544 trillion. OTC contracts are typically customized agreements between two parties, such as bilateral swaps, options, and forwards. Due to their customizable nature, OTC contracts offer flexibility but also come with higher counterparty risk.
On the other hand, the total notional amount of exchange-traded contracts amounted to $95 trillion. Exchange-traded contracts are standardized derivatives that are bought and sold on organized exchanges, such as futures contracts. These contracts provide greater transparency, liquidity, and lower counterparty risk compared to OTC contracts.
The significant difference in notional amounts between OTC and exchange-traded contracts highlights the substantial size and complexity of the OTC derivatives market. However, it's important to note that notional amounts do not represent the actual value at risk but serve as a measure of market size and potential exposure.
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