• Overview
      • Secure Digital Markets Inc (SDM) is a leading global digital asset trading, marketing making, and treasury management firm with an MSB license that provides boutique financial services to small medium and large capital management groups, payments and forex corporations and other financial institutions, governments and individuals. SDM was founded in 2017, is headquartered in Toronto and New York City with partners and representatives in financial centers around the world.

    • About Us
      • Secure Digital Markets is committed to providing cutting edge trading solutions to financial institutions and global liquidity to digital asset issuers with a mission of making blockchains and digital assets mainstream. SDM is a specialized digital asset trading firm within GDA Capital Corporation, a diversified capital markets firm with operations around the world.

    • Who we serve
      • Secure Digital Markets serves institutional clients across the blockchain industry including miners of bitcoin and alternative digital currencies, capital markets institutions, active traders, exchanges, BTM Networks, and high net worth individuals.

    • Products
      • Secure Digital Markets has a suite of financial products including SDM.live that provide us with off market liquidity at all times of bitcoin and alternative digital currencies.

    • People and Culture
      • We pride ourselves on our innovative corporate culture and passionate team members. Our organization is only as good as our people and we strive to consistently raise the bar by bringing the smartest group to the table.

    • Leadership
      • See the biographies of our firm’s board of directors and senior management.

    • Locations
      • Locate our offices around the world in Canada, the United States and globally.

    • Overview
      • We provide liquidity and market making strategies to digital asset issuers and large holders and boutique trading and treasury management strategies to individuals, hedge funds, family offices, private equity funds and other capital management firms. Learn more about our various businesses and find a solution that meets your personal or business needs.

    • Trading
      • Trading and liquidation services to help organizations issuing or holding digital assets with liquidity and boutique trading and investment strategies for individuals and capital management firms.

    • Treasury Management
      • Customized treasury management strategy to liquidate digital assets over set periods of time with specific return goals across global exchanges to ensure limited price movement and hedge long term exposure to any particular asset.

    • Digital Asset Custody
      • Customized custody solutions implementing secure institutional software infrastructure.

    • Cash Management
      • Cash management services for firms who transact to buy or sell digital assets using cash.

    • Overview
      • Our people share in our mission of advancing the digital asset and blockchain industry by providing access to global liquidity and market making strategies for digital asset issuers and boutique digital asset trading strategies for capital management firms and other financial institutions.

    • Our Founders
      • Our founders our pioneers in digital asset and blockchain trading.

    • Our Team
      • We commit people, capital and ideas to help our clients, shareholders and the communities we serve to grow.

    • Business Principles
      • Secure Digital Markets works with the highest ethicacy and always ensures that we ca can deliver for our clients. In addition to our trading and brokerage services, we look to add value in other ways by being a part of our network.

    • Overview
      • Secure Digital Markets analysts and traders share insights, market research and industry updates that are impacting the blockchain industry.

    • Corporate News
      • Recent milestones and progress from Secure Digital Markets and our subsidiaries

    • Market Insights
      • Digital asset trading, treasury management and liquidation tips for hedge funds, private equity firms, etc

    • Trading Information
    • FAQ
      • Commonly asked questions related to digital asset trading, capital management, treasury management, liquidity

  • Careers
  • Contact
  • Trade with SDM
Making An OTC Trade

What To Watch Out For When Making An OTC Trade

  • In contrast to centralized exchanges, OTC platforms don’t require an order book to get transactions executed but rather source liquidity from an aggregated pool of electronic liquidity providers and market makers. 
  • OTC trades account for a very large portion of daily crypto transactions, over $12 billion Bitcoin is transacted daily via OTC markets. 
  • ‘Secure Digital Markets’ (SDM) is a leading OTC desk that deploys an ‘electronic communication network’ (ECN) to provide deep liquidity to customers in over 60 international markets.

Over the years, Over The Counter (OTC) trading has served as one of the most popular ways to trade a large variety of digital assets. A large majority of Bitcoin trades happen within the OTC markets. Amidst the rising market uncertainties, OTC trades seem to have recorded the highest trading volume so far. There are some nuances to making an OTC trade that we’d like to go into.

Crypto OTC market is becoming increasingly popular in recent times due to its high layer security and reliability compared to traditional crypto exchanges. OTC provides traders with a more private trading environment than centralized exchanges. In a typical OTC market, a broker finds both sellers and buyers, verifies their identity and matches their contract before closing the deal. However, it should be noted that SDM has developed efficiencies that make this matchmaking process far smoother.

How OTC Trading Works 

Most retail investors are used to regular centralized exchanges. To have a better picture of how an OTC platform works, you might have to view an OTC platform as one that doesn’t require an order book to get transactions executed. 

Making an OTC trade requires that a client pre-fund the account as part of risk management, and then the system pairs buyers and sellers with the help of a broker. While making an OTC trade, your funds are never managed by an intermediary or a third party. 

BTC OTC

But one thing to always keep in mind is that an OTC brokerage verifies and stamps the identity and trust of trading participants before trades are executed. Prior to any transactions executed with SDM, we perform enhanced due diligence to make sure all clients are in compliance with all KYC and AML regulations. Dealing with OTC brokers takes a lot of time to establish trust. However, this is a key element required to avoid fraud issues while making an OTC trade. 

Common Pitfalls In Making An OTC Trade

One major issue plaguing the OTC markets is the lack of transparency and proper regulations. Most OTC companies provide very little information about their mode of operations, which most times are likely to mislead traders. This makes it difficult for most traders to identify loopholes within an OTC brokerage.

loopholes

Due to the minimal regulations required to run a brokerage platform, traders might not be able to make informed decisions regarding a particular broker in terms of market manipulations as easily as one would have thought. SDM does not trade against clients or engage in proprietary trading, which removes any potential conflicts of interest. It is also important to note that SDM has their MSB (Money Services Business) license. 

Another major pitfall most traders are likely to face while making an OTC trade is the low trading volume associated with most brokerage platforms. This low trading volume translates into a large difference between the ‘Bid’ and the ‘Ask’ price. This could be a major dilemma for investors as such trades automatically result in the investor making a loss position depending on the degree of the percentage difference.  

Things To Watch Out For When Choosing A Brokerage Service

As already stated, investors/traders must always do due diligence when adopting an OTC platform. Liquidity is a main consideration when seeking services of an OTC desk. Highly liquid platforms are likely to have a wide range of user base across major countries and markets. By achieving this, users can be less worried about the challenge of having a wider ‘spread’  (the difference between the bidding and asking price).

Caution

Among today’s brokerage platforms, Secure Digital Markets (SDM) is working very hard to meet traders’ expectations. Secure Digital Market is a North American based asset brokerage that deploys state-of-the-art technology to provide high liquidity to traders in over 60 international markets. 

SDM was founded on the strength of a cutting edge technology that not only provides an OTC market but also offers a flexing lending product, secure custodian services, and treasury management as well. 

By design, Secure Digital Markets is the first asset brokerage firm to have looked deeply into solving the issue of liquidity in OTC trades. To achieve this, SDM deploys an electronic communication network (ECN) that ensures high liquidity by accessing a large network of international markets. 

The company has also been able to solve the issues of transparency by making sure that traders can verify trading parties before making an OTC trade. The company has also provided comprehensive information about its services and mode of operation via its official website. This ensures that traders are properly informed before making an OTC trade. 

Final Thoughts

The rising popularity of OTC trades and the current challenges being faced by OTC traders are the major motivations fueling the innovations behind the ‘Secure Digital Markets’ brokerage services. As the global market continues to evolve, the system provides traders with a wide range of trading options with an elegant market interface and sophisticated trading tools. 

Interestingly, SDM seems to have taken the lead in Canada offering liquidity for traders, investors alike through its brokerage service. Currently, the company is exploring other global markets to expand its current portfolio of the 60+ international markets. 

Sign up for the Broker's Beat, our weekly email about digital asset trends shaping markets, industries and the global economy.

Do NOT follow this link or you will be banned from the site!