OTC Derivatives Data
The Ultimate Guide to OTC Derivatives Data 2021
What is OTC Derivative Data?
Over-the-counter derivative defines a financial obligation that is entered into by two counterparts without extensive intermediation or regulation. A derivative refers to a priced security whose value is derived from one or more principal assets. The value of a derivative is appraised by changes in the underlying asset that may include either stock, bond, commodities, currencies, interest rates, and market indexes. Based on where the selling and buying derivatives takes place, they can either be over-the-counter or exchange-traded. As such, OTC derivative data highlights information about private financial obligations that are established among two or more counterparties.
How is OTC Derivative Data collected?
OTC derivative contracts are usually active on a long term basis. To keep up to date with data related to OTC derivatives, information is collected to keep track of transaction details at the inception of the contracts and during the existence of the contracts. The collection of OTC derivative data employs two main approaches, the lifecycle approach, and the snapshot approach. In the lifecycle approach, data is collected and reported at the inception of the contract and during the resultant events that may have a direct bearing on the contract before it expires. Snapshot approach on the other hand involves the recording of data at the inception of derivative contract, preceded by the frequent update of the pre-existing state of the contract, that captures all the alterations that have taken place to the contract since the previous update and the current market values.
What are the attributes of OTC Derivative Data?
OTC derivatives are largely attributed based on the underlying asset by which the value is derived. As such, OTC derivative data is comprised of the following attributes:
- Interest rate derivatives in which case the underlying asset is a standard interest rate
- Commodity derivatives where the underlying assets are physical commodities.
- Data on Forex derivatives that derives value from foreign exchange fluctuations.
- Equity derivatives information whose underlying are equity securities.
- Fixed income derivatives for fixed income securities.
Each of the listed attributes is made up of functional approach features of OTC derivative data. These features range from operational data, product information, transaction economics, valuation data, and counterparty information, underlying information, and event data.
What are the uses of OTC Derivative Data?
Companies can use OTC derivative data to assess the level of flexibility in financial market operations when trading privately. Companies use this data to determine how best the available OTC derivatives are tailored to the specific needs of the company such as the repercussions of a given exchange rate or commodity price over a given time. This data is also used by companies to plan out better risk management strategies. OTC derivative data can be used by companies, in this case, to assess how best to cushion against interest rate risks, currency risks, and commodity risks. By trading in OTC derivatives, some companies believe that they are presented with an avenue that helps protect the consumer against commodity price fluctuations, hence the need to have access to this data.
How can a user assess the quality of OTC Derivative Data?
OTC derivative data is meant to empower decision-makers, traders, compliance officers, and risk managers on how to assertively determine the price value of underlying assets across the derivative enterprise with an accurate perception of valuation and transparent practices. Based on this fact, assessing the quality of OTC derivative data in terms of accuracy and valuations is an important undertaking by the concerned stakeholders. Because of a broad base of use cases for OTC derivative data, accuracy is an important factor of the data that helps users to adapt their needs effectively according to the information. Accuracy of OTC derivative data gives users detailed inputs about the price of underlying assets, contextualization of the market, risk assessment, and identification of opportunities.
Who are the best OTC Derivatives Data providers?
Finding the right OTC Derivatives Data provider for you really depends on your unique use case and data requirements, including budget and geographical coverage. Popular OTC Derivatives Data providers that you might want to buy OTC Derivatives Data from are Exchange Data International, FinPricing, IHS Markit, CME Group, and DTCC.
Where can I buy OTC Derivatives Data?
Data providers and vendors listed on Datarade sell OTC Derivatives Data products and samples. Popular OTC Derivatives Data products and datasets available on our platform are EDI Outsourcing Service to keep your security reference database updated by Exchange Data International, FinPricing FX Forward Points (Spreads) Data - Forex Data (Global) by FinPricing, and FinPricing LIBOR Yield Curve, Zero Rate Curve Data (114 Countries inc. USA, UK, Canada, South Africa) by FinPricing.
How can I get OTC Derivatives Data?
You can get OTC Derivatives Data via a range of delivery methods - the right one for you depends on your use case. For example, historical OTC Derivatives Data is usually available to download in bulk and delivered using an S3 bucket. On the other hand, if your use case is time-critical, you can buy real-time OTC Derivatives Data APIs, feeds and streams to download the most up-to-date intelligence.