Futurizing Swaps: A More Cost-Effective Way To Trade

Since its inception, the non-FX/equity OTC derivative market was largely self-regulated. As the market grew from the late 1990s to mid-2005, this model worked well. New dealers were entering the OTC derivative market and competition amongst this group was fierce. However, as the participating dealer base peaked around 2005, so too did conditions of free money and leverage. These conditions helped fuel the financial crisis that would soon follow and completely reshape the OTC derivative and financial markets.