Which one is better, on-exchange trading or over-the-counter trading?

Both on-exchange and over-the-counter trading have advantages and disadvantages depending on personal needs and preferences. On-exchange transactions are highly liquid and regulated, while OTC transactions have low fees and a wide variety of products. The specific choice depends on: liquidity, security, handling fees, varieties, trading experience, and risk appetite.

Comparison between on-exchange trading and over-the-counter trading

Which one is better?

The answer to this question depends on personal needs and preferences. Both on-exchange and over-the-counter trading have advantages and disadvantages.

On-exchange trading

• Advantages:

  • High liquidity and fast order execution.
  • High transparency, prices are publicly visible.
  • Regulated and highly secure.

• Disadvantages:

  • Transaction fees may be higher.
  • Trading varieties are limited and may not meet all needs.
  • Subject to compliance with the rules and policies of the specific exchange.

Over-the-counter (OTC)

• Advantages:

  • Lower transaction fees.
  • A wider range of cryptocurrencies can be traded.
  • Can negotiate trading prices and terms with other traders.

• Disadvantages:

  • low liquidity and slow order execution.
  • Transparency is low and prices may not be disclosed.
  • The risk is higher and there may be counterparty risk and fraud risk.

Specific choice

• Those who want fast execution of orders and high security: On-site trading.
• Those who want low handling fees and a wide range of trading options: OTC trading.
• Those who want a personalized trading experience and focus on negotiation with other traders: OTC trading.
• Those with low risk tolerance and inexperience: On-exchange trading.

Ultimately, which trading method you choose depends on your personal trading strategy, risk appetite and specific needs.

The above is the detailed content of Which one is better, on-exchange trading or over-the-counter trading?. For more information, please follow other related articles on the PHP Chinese website!