“Over the counter” (OTC) refers to financial transactions that are not traded on an organised market but rather directly between two counterparties. The vast majority of FX transactions are traded OTC, often between an end-user and a market-making bank or other Liquidity Provider.

Many of the terms and conditions are standardised, usually through the use of ISDA contracts or other framework agreements, which reduces the number of variables that have to be agreed for each transaction.