Over-the-Counter Trading
Large trades arranged directly between two parties or through a desk, instead of being placed on a public exchange.
An over-the-counter desk quotes a single price for an entire size, taking the price impact onto its own book and hedging it afterwards, which is why large participants use desks rather than working an order through a public book. Settlement is bilateral and is handled by prefunding, escrow, or a trusted settlement agent, so counterparty selection matters more than on an exchange. Because these trades are not printed on a public venue, they do not appear in exchange volume statistics, and a substantial share of institutional activity is therefore invisible in public data. Desks operate both as principal, trading their own inventory, and as agent, sourcing the other side from their client network.
In practice
A treasury moving a large position may use a desk that quotes one price for the entire amount, rather than working the order through a public book over hours.
The common misunderstanding
Public exchange volume understates total market activity, because over-the-counter trades settle bilaterally and are never printed on a venue.