Disclosure: I work in growth at NovoEX, which runs an OTC desk. I keep that to one short section at the end; the questions below are worth asking any desk.
Most people buy and sell crypto through an exchange order book, and for everyday amounts that works well. But if you're a small business converting a large payment, a trader moving a big position, or a founder paying a team from a treasury, you can hit a point where the order book stops being your friend. That's where over the counter (OTC) desks come in.
Why big orders struggle on an order book
An order book is a list of buy and sell offers at different prices. When you place a large market order, it eats through the best offers first, then the next ones, and so on.
- Slippage. Your average price ends up worse than the price you saw on screen, because you consumed several levels of the book.
- Visibility. Large orders are visible. Other traders can react, moving the price against you while you're still filling.
- Splitting is a chore. Breaking a trade into many small orders reduces the impact but takes time, attention, and exposes you to the market moving in the meantime.
If you notice your trades regularly move the price, or you spend an afternoon slicing one conversion into pieces, it's worth asking an OTC desk for a quote.
How OTC trading works
The details vary between desks, but the flow usually looks like this:
- Onboarding. You complete identity checks with the desk before you can trade.
- Request for quote. You tell the desk what you want: the asset, the amount, buy or sell, and how you'll settle.
- Quote. The desk gives you a price, usually valid for a short window.
- Acceptance. If you accept, the price is locked for that trade, no matter how the market moves.
- Settlement. Funds and crypto are exchanged according to the agreed terms, and you get a confirmation.
The big advantage is that you know your price before you commit, and your trade doesn't appear on a public book.
What to ask an OTC desk before trading
Not every desk works the same way. These questions help you compare:
- How is your price formed? Is there a separate fee, or is it built into the quote? You want to understand the all in cost.
- How long is a quote valid? And what happens if you accept just as it expires?
- Who sends first? Settlement order matters. Ask whether you send fiat first, they send crypto first, or both move at the same time through an account at the desk.
- What are the settlement times? Ask about crypto confirmations and fiat transfer times for your currency.
- Which assets and networks do you support? Sending a token on the wrong network can be an expensive mistake.
- Is there a minimum trade size?
- What documents will you need? Expect identity checks and questions about source of funds for larger trades. A desk that asks nothing should worry you more than one that asks a lot.
- How do I get support during a trade? A named contact or a live channel matters when money is in flight.
Settling to an IBAN
For many people the trade isn't finished until money is in a bank account. Before you trade, check:
- Can the desk pay out to an IBAN in your own name, in the currency you need?
- Which rail will be used, for example SEPA for EUR or SWIFT for other currencies?
- Does the name on the payout account match the name on your OTC account? Mismatches cause delays and questions at the receiving bank.
- Will you get a trade confirmation you can keep as a source of funds record? Your bank may ask why a large payment arrived, and a clear confirmation answers that quickly.
Red flags
- A price that's far better than the market for no clear reason.
- Pressure to send funds before you've seen written terms.
- A request to pay a third party or a personal account that isn't the desk's.
- No identity checks at all.
Where NovoEX fits
NovoEX runs an OTC desk for larger trades, and because you also get an Instant IBAN in your own name with fiat and crypto in one account, settlement can land in EUR, GBP or USD without moving between providers. NovoEX is Registered with FINTRAC. KYC is required. Virtual cards are coming soon. You can open an account here and ask the desk for a quote.
Over to you
At what point did you first decide an order was too big for the order book, and how did you handle it? I'd like to hear how others think about that threshold.
Albert Perez, NovoEX
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