OTC options are exotic options that trade in the over-the-counter (OTC) market rather than on a formal exchange like exchange traded option contracts. These types of options offer investors greater flexibility and access to more customized products, as well as potentially higher returns. OTC option trading is not subject to the same regulatory oversight as listed exchanges, which can make them riskier investments but also allow for more creative strategies.One advantage of OTC options is that they provide traders with much greater flexibility when it comes to crafting their strategy. Many times these instruments can be tailored to meet specific needs or objectives, such as hedging against certain risks or taking advantage of unique opportunities in the markets at any given time. Additionally, there may be fewer restrictions on how many contracts one can buy or sell compared with those found on an organized exchange like CBOE Futures Exchange (CFE). This makes it easier for investors who want larger positions than what would normally fit within a standard contract size limit set by an official marketplace.Finally, because these transactions take place outside of regulated exchanges there may be less transparency and liquidity available for buyers and sellers alike – making prices hard predict accurately without detailed knowledge about current market conditions from multiple sources including brokers and other participants in the transaction process itself.. For this reason some people view OTC trades as being high risk investments since potential losses could exceed initial deposits if things don’t go according plan due lack information available prior entering into agreement between two parties involved at any particular moment time frame allotted under terms specified each individual contract type used during transaction process itself.