Common use of Off-Exchange Transactions in Derivatives Clause in Contracts

Off-Exchange Transactions in Derivatives. It may not always be apparent whether or not a particular derivative is arranged on exchange or in an off-ex- change derivative transaction. Your firm must make it clear to you if you are entering into an off-exchange derivative transaction. While some off-exchange markets are highly liquid, transactions in off-exchange or non-transferable derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk. Bid prices and offer prices need not be quoted, and even where they are, they will be established by dealers in these instruments and consequently it may be difficult to establish what a fair price is.

Off-Exchange Transactions in Derivatives. It may not always be apparent whether or not a particular derivative is arranged on exchange or in an off-ex- change exchange derivative transaction. Your firm must make it clear to you if you are entering into an off-exchange derivative transaction. While some off-exchange markets are highly liquid, transactions in off-exchange or non-transferable derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk. Bid prices and offer prices need not be quoted, and even where they are, they will be established by dealers in these instruments will establish them and consequently it may be difficult to establish what a fair price is.

Off-Exchange Transactions in Derivatives. It may not always be apparent whether or not a particular derivative is arranged on exchange or in is an off-ex- change exchange derivative transaction. Your firm must make it clear to you if you are entering into an off-exchange derivative transaction. While some off-exchange markets are highly liquid, transactions in off-exchange or non-transferable 'non transferable' derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk. Bid prices and offer prices need not be quoted, and and, even where they are, they will be established by dealers in these instruments and consequently it may be difficult to establish what is a fair price isprice.