Trade Life Cycle in OTC Markets

Trade life cycle in OTC markets A trade goes through 3 main departments in an organization: Front Office Middle Office Back office Stages of the Trade life cycle in OTC markets: Front Office Trade Initiation: The trader will try to find a seller either by directly contracting counterparties by phone, email, or through trading platforms. Trade Execution: The trader notes down the order details on the trade sheet/Trade blotter/Term sheet. Trade Capture: The details mentioned on the trade are captured in an order management system(OMS) or risk management system(RMS). Middle Office Trade Enrichment: Additional required information for settlement of trade is added in this stage. Trade Verification: The trade sheet is compared with the details on the OMS or RMS system. Trade Validation: It is done to avoid operational risk and you should check the following points: Trade Check: If all the economic and non-economic details of the trade are populated and correct. If we see if the trader wh...