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115.080.01.02 Derivatives - Reading 48 - 2. Exchange-Traded versus Over-the-Counter Derivatives

# 2. Exchange-Traded versus Over-the-Counter Derivatives

## a. define a derivative and distinguish between exchange-traded and over-the-counter derivatives;

What is an exchange-traded derivative? Exchange-traded derivatives are created, authorized, and traded on a derivatives exchange, an organized facility for trading derivatives.

What is an over-the-counter derivative? Over-the-counter derivatives are transactions created by any two parties off a derivatives exchange.

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CFA

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- 115.080.01 Derivatives - Reading 48 - Derivative Markets and Instruments to 115.080.01.02 Derivatives - Reading 48 - 2. Exchange-Traded versus Over-the-Counter Derivatives