September 2023


Listed options vs. over-the-counter (OTC) options: key differences to consider

Options are financial derivatives that grant the holder the right, without the obligation, to buy, sell or trade an underlying asset at an agreed-upon price within a specified period. This flexibility allows investors to profit from potential asset price fluctuations without owning the asset. By utilising options, investors can strategically manage risk and enhance their investment strategies in various market conditions.

There are two primary types of options: Listed options, which are traded on exchanges and have standardised terms, and Over-the-Counter (OTC) options, customised contracts traded directly between parties. Each type has unique characteristics and is utilised to achieve specific financial objectives based on an individual’s risk appetite and investment strategy.

Listed options

Listed options are contracts that are standardised and traded on an exchange. These options have a set strike price, expiry date, size of the contract, and other features. One of the advantages of listed options is that many investors are familiar with the process and can easily access them through their brokerage accounts.

The liquidity of these options also contributes to their popularity; large blocks of contracts can be traded quickly and at relatively efficient prices with minimal transaction costs. Listed options have limited risk exposure since the exchanges clear them. It limits the counterparty risk and ensures that both parties fulfil their obligations.

Over-the-counter options

OTC options, on the other hand, are customised contracts traded directly between two parties in an over-the-counter market. These contracts often provide more flexibility than listed options regarding strike price and expiry date. OTC options also have the potential for more significant profit or loss depending on the market conditions.

The main benefit of OTC options is that they are tailored to meet an investor’s specific needs, such as a foreign currency option or a credit default swap. The disadvantage is that the exchange needs to clear these contracts, and therefore they possess a greater counterparty risk.

Key differences to consider

When deciding which type of option to use, investors in Singapore should carefully evaluate their investment goals and thoroughly assess the pros and cons of each product. Listed options, which are highly regulated, provide a sense of security as they involve little counterparty risk and come with standardised terms that can be easily accessed.

On the other hand, OTC options offer greater flexibility, allowing for tailored contracts that specifically cater to an investor’s unique needs. It is important to note that these contracts are not cleared by an exchange, which may introduce a higher default or fraud risk level. Therefore, investors must weigh these factors and make an informed trading decision based on their circumstances and risk tolerance.

Benefits of using a broker for trading listed options

Trading listed options through a broker offers several benefits. Firstly, the broker’s expertise and experience are crucial in navigating the complex world of options. They have a fundamental understanding of the options market and can aid in identifying appropriate strategies for various market conditions. A reliable broker will provide critical insights and advice based on an in-depth knowledge of your risk tolerance and investment objectives.

Brokers in Singapore provide access to a wide range of listed options. Depending on the size and reputation of the broker, they may offer options from numerous exchanges across the globe, thus increasing the diversity of your potential investments.

Brokers often provide educational resources and tools to help investors understand how options work and how to use them effectively. It might include webinars, eBooks, articles, and interactive tools that simulate trading scenarios. Such resources are invaluable for novice investors needing to learn the basics and experienced traders looking to refine their strategies.

A broker can simplify the logistics of trading. They manage the buying and selling options contracts on your behalf, ensuring transactions are carried out promptly and efficiently. It saves the investor valuable time and reduces the potential for errors.

Brokers are regulated by financial authorities, providing additional security for investors. While trading listed options can be profitable, it comes with risk. A reliable broker can help manage this risk and ensure a smooth trading experience. Nevertheless, investors should still conduct thorough research and consider their risk tolerance when trading options. Learn more about Singaporean brokers with as an example.

The bottom line

Options are an effective tool to help investors manage risk and take advantage of financial market opportunities. Whether an investor opts for a listed or over-the-counter option, they must understand the differences between the two types of products and how those differences can affect their bottom line. With due diligence, investors can choose the option that best meets their investment and financial goals and risk appetite.

Investors in Singapore should also have a thorough understanding of the basic concepts of options trading and the associated risks of purchasing and selling them. By doing so, investors can make sound decisions most effectively using these derivative products. With the proper guidance and due diligence, options can efficiently protect one’s portfolio and take advantage of market opportunities.

read more

What Is The Purpose Of A Moving Company?

Moving to a new place can be both exciting and daunting. The thought of exploring new territory and starting anew can be exhilarating. But the process of actually moving is often overwhelming and stressful. This is where a moving company comes in. They provide an array of services to make relocating as smooth as possible. Although the primary function of a moving company is to transport your belongings from one place to another, they serve many other purposes. Moving companies offer various services to facilitate a smooth and efficient transition during the moving process.

These services may include:

Moving large or heavy items

Moving large or heavy items, such as furniture, appliances, and pianos, can be difficult and dangerous. A moving company has the equipment and expertise to move these items safely and efficiently. They also have specialized vehicles designed to transport bulky and heavy items, ensuring they arrive at your new home safely.

Storage Options

Sometimes, you may need more time to move all your belongings to your new home. For instance, if you are downsizing, you may have to temporarily store some of your items. A moving company provides storage options that cater to your specific needs. They have climate-controlled secure storage facilities, ensuring that your items remain in excellent condition.

Handling logistics

A significant aspect of moving is logistics. Hiring a moving company means you don’t have to worry about the logistics of your move. They handle everything, from ensuring you have the necessary permits to park your vehicle to planning the route to your new home. With a moving company, you can concentrate on other aspects of your move.

Stress-free moving

Movers Westchester make the process of relocating much easier and less stressful. They take care of all the details, allowing you to focus on other important things, such as settling into your new home and saying goodbye to your old neighbourhood. They make your move a hassle-free experience, giving you peace of mind and making the transition successful.

Professional assistance

Moving companies have an experienced team of professionals who ensure everything is done systematically and on time. They provide expert guidance and support throughout the process, making moving a much smoother experience. Whether heavy furniture or delicate glassware, moving companies know how to handle every item carefully.

Comprehensive relocation services

Finally, a moving company offers comprehensive relocation services catering to your needs. They can customize their services to fit your budget, timeline, and specific requirements. Whether you need help packing and unpacking, moving delicate items, or transporting your car, a moving company provides a one-stop shop for all your relocation needs.


A moving company serves many purposes beyond transporting your belongings from one place to another. They provide packing and unpacking services, specialize in moving large or heavy items, offer storage options, handle logistics, and provide comprehensive relocation services. Hiring a moving company ensures your move is smooth, efficient, and stress-free. If you are planning a move, we recommend that you consider hiring a moving company for all your relocation needs.

read more