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Manage risk and maximize opportunities trading OTC with StoneX

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Benefit from superior customizability, relaxed margin requirements and better control over your input costs by trading over the counter (OTC) versus on the exchanges.

StoneX puts the power of the OTC markets in your hands.

Develop strategies, customize inputs, execute swaps and analyze your hedging profile – all from your desktop – with tools and platforms developed with your business in mind. Visit the StoneX OTC Technology page to learn more.
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Who can benefit from trading over the counter with StoneX?

Elevators

Grow your business with the customized origination tools your producers now expect.

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Farmers

Keep control of your bushels and basis while managing your biggest and most volatile expenses.

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Corporates

Trade the OTC markets and protect your margins against budget-busting upside price risk.

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Have questions? We can help.

Want to know how our products and services can work for you? Our StoneX Support Team is ready to assist with any questions you have and provide a customized solution to meet your needs.

Advantages of trading OTC with StoneX Markets

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Customizable solutions for your business

We structure every OTC trade with your unique risk profile in mind – a benefit you will not see on the exchanges.
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Potentially lower margin requirements

Our margin requirements are typically 20% less than commonly available exchange-mandated margin requirements.
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Equal or better liquidity compared to the exchanges

Our deep liquidity means we can extend positions beyond the time periods available via exchange-traded products.

Comprehensive commodity markets coverage

Experience unrivaled OTC trading with StoneX Markets – covering diverse markets from dairy to interest rates, our tailored solutions optimize your exposure and liquidity management.

Discover more insights

Dive into comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

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FAQ

What OTC products does StoneX offer?

The StoneX trade desk can tailor OTC products to meet a wide range of risk profiles and market views. Products range from simple swaps to customized and exotic options to structured products. Below is an overview of the four principal product types we trade:

  • Lookalike Options and Swaps: Lookalike Options and Swaps are also known as Plain Vanilla Options or Swaps and are SXM’s most basic OTC product. “Lookalikes” contain the same hedge and optionality features as their exchange-traded equivalent so far as contract specifications of strike price, contract size and expiration date
  • Customizable Options: Customizable Options are Lookalike Options with the additional benefit of customizable strike price, contract size and expiration date. While the customizability allows this product to rein in a better hedge for the customer, it does limit the Customized Options optionality from being fungible with the exchange. Due to this lack of fungibility, Customized Options cannot be translated to an exchange-traded equivalent unless and until the option expires to a swap. The swap can then be translated into an exchange-traded equivalent futures position.
  • Exotic Options: StoneX Markets utilizes the Exotic Options of Asian, Digital and Barrier options. Because the exchange does not have anything similar to these products, the options are not fungible with an exchange-traded option. However, as with all of our OTC Instruments, credit financing is available to offset margin costs and if the option expires into a swap an EFRP can translate the swap to a corresponding exchange-traded futures position.
    • Asian options determine payout by figuring the average of the underlying price over a pre-set period of time. Example, an average of the futures settlement each Friday for a month.
    • Digital options also known as Binary or All-Or-Nothing options pay the owner a fixed amount if the market settles at a predetermined level. On the reverse, if it does not settle at that level, the owner receives zero.
    • Barrier options also known as “knock out/knock in” “down-and-out/down-and-in” or “up-and-out/up-and-in” are based on the market touching a pre-determined level where the option is either activated (knocked-in) or deactivated (knocked-out).
  • Structured Products: Structured Products/Accumulators allow a Customer to “accumulate” short swaps above the current market or long swaps below the current market so long as the market stays within specified range. This range is decided upon by the Broker/Customer with the range limitations typically being marked by an accumulation level on one end and a barrier level on the other end.

To learn more about how these benefits may apply to your specific market view and risk management needs, please contact us.

What are OTC markets?

OTC, or over-the-counter markets, are decentralized platforms where financial instruments such as derivatives are traded directly between two parties without the involvement of an exchange. OTC markets are often used for customized, complex, or illiquid products that cannot be traded on public exchanges. In the commodities market, OTC trading is used to hedge against price volatility risk, which is a common concern for farmers/producers, grain elevators/grain originators, and food and beverage manufacturers.

StoneX can help you navigate a comprehensive array of choices for your hedging needs – from plain vanilla options and swaps to lookalike options, exotic options and structured products.

Let’s get connected

To learn more about how our customized financial solutions can help you stay one step ahead in the global markets, contact our team today.

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The trading of commodities and derivatives such as futures, options, and swaps involves substantial risk of loss and may not be suitable for all investors. Advisory services as well as the trading of futures and options is available through various subsidiaries of StoneX Group Inc. including but not limited to the FCM Division of StoneX Financial Inc. Public Disclosures for the FCM Division of StoneX Financial Inc. The trading of over-the-counter products or swaps is available through subsidiary StoneX Markets LLC to individuals or firms who qualify under CFTC rules as an eligible contract participant. Please click here for the full disclaimer.

Trading over-the-counter and exchange-traded derivatives is not suitable for all investors and involves substantial risk. StoneX Markets, LLC (“SXM”), a subsidiary of StoneX Group Inc., is a member of the National Futures Association and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. Any recipient of this material who wishes to express an interest in trading with SXM must first prequalify as an ECP, independently determine that derivatives are suitable for them and be accepted as a customer of SXM. Trading over-the-counter (“OTC”) products or “swaps” involves substantial risk of loss. This is not an offer to buy or sell any derivative. This material does not constitute investment research and does not take into account the particular investment objectives, financial situations, or needs of individual clients or recipients of this material. You are directed to seek independent investment and tax advice in connection with derivatives trading.

StoneX Financial Pte. Ltd. ("SFP") (Co. Reg. No 201130598R) is regulated by Monetary Authority of Singapore and holds a Capital Markets Services Licence (CMS100476) for Dealing in Securities, Collective Investment Schemes, Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading, is an Exempt Financial Advisor under the Financial Advisors Act 2001, and is a Major Payments Institution (PS20200625) under the Payment Services Act 2019 for Cross Border Money Transfers.

StoneX Financial (HK) Limited ("SHK") (CE No.: BCQ152) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.

SFP acts as an appointed agent for SFL's payment services business.