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Curious about adding OTC products to your hedging activities?
Discover the benefits of trading OTC with StoneX Markets (SXM) – the first non-bank swaps dealer to be provisionally registered by the CFTC.
SXM Technologies
Flexible solutions with benefits you can’t get trading on the exchanges.
Customizability
Ability to customize contract size, strike price and expiration date – as well as solutions with zero upfront cost and guaranteed quantities
Potentially lower margin requirements
Potentially 20% lower than exchange-traded requirements
Equal or better liquidity
Beyond contract month limits available from exchange-traded products
OTC instruments from SXM Technologies
Over 300 OTC products available from ags, softs, dairy, livestock and energy to metals, forex, interest rates and equities.
Learn how SXM Technologies can customize our OTC products to match your specific business risk profile and market view – from simple swaps to exotic options and structured products. Our OTC product offerings include:
- Lookalike (or “plain vanilla”) options and swaps – the advantages of exchange-traded products in terms of strike, expiration date, and premium. OTC instruments utilize a financial/cash settlement and are traded bilaterally. On the other hand, exchange listed products utilize a physical delivery or financial settlement style and centrally clear all counterparty risk.
- Customizable options – build on the benefits of lookalike options by adding in more customizable expiration dates, strike, or futures reference contracts.
- Exotic options (Asian, Digital and Barrier options) – providing added customizability with the capacity to decrease upfront costs due to the ability to remove coverage when not needed by the client.
- Structured products – typically provided by SXM at zero up-front cost, these products “accumulate” an agreed-upon short swap above the current market or a long swap below the current market within a specified range.
Quotes available 24/7/365 via our structured products app
First-in-class transparency: access to 22 structured products available inside our market-disrupting technology
Discover how qualified customers can view OTC structured product indications and request quotes in the over-the-counter commodities markets – 24 hours, 7 days a week – via SPOC, our breakthrough structured product online calculator.
From novice to expert, SPOC contains the education and support tools you need to execute hedging strategies that align as closely as possible with your unique risk exposures and strategic goals.
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FAQ
What are exotic options?
Exotic Options with SXM include Asian, Digital and Barrier options.
Asian options determine payout by figuring the average of the underlying price over a pre-set period. (Example: an average of the futures settlement each Friday for a month.)
Digital options (a.k.a. Binary or All-Or-Nothing options) pay the owner a fixed amount if the market settles at a predetermined level. Conversely, if it does not settle at that level, the owner receives nothing.
Barrier options are based on the market touching a pre-determined level where the option is either activated (knocked-in) or deactivated (knocked-out).
What are OTC options?
OTC products are designed to deliver the benefits of exchange-traded futures and options, with the advantage of customizable terms that align more closely with a customer’s unique hedging needs – including non-standard quantities, strike prices, expiration dates, etc. They can range in complexity from swaps, which behave like conventional futures and options, to structured products, in which multiple contracts combine to pursue a larger strategy. In all cases, OTC products aim to create more flexible, customizable solutions for each customer’s specific needs.
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.
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.