Be Cautious When Trading in OTC Pre-Markets
Trading in OTC (Over-The-Counter) pre-markets can be risky. I once experienced a situation where the seller didn’t send the tokens after I bought them at a very low price. By the time the trade was supposed to close, the token’s price had multiplied several times.
Weaknesses and Vulnerabilities of OTC Transactions:
1. Lack of Regulation: OTC markets are less regulated, which means there are fewer protections for traders.
2. Low Transparency: Prices and trading volumes are not always publicly available, making it hard to verify fair pricing.
3. Counterparty Risk: There’s a higher risk that the other party might not fulfill their part of the deal, as happened in my case.
4. Liquidity Issues: OTC markets often have lower liquidity, meaning it can be harder to buy or sell large amounts of tokens quickly.
5. Potential for Fraud: The decentralized nature of OTC trading can make it easier for fraudulent activities to occur.
Always do thorough research and consider these risks before engaging in OTC trades.
