Trading in OTC contracts occurs between two parties on the forwards market, where the terms of the agreement are determined by the parties themselves. Public commodity exchanges like the Chicago Mercantile Exchange (CME) trade futures contracts based on a specified size and settlement date.

OTC contracts are a type of contract that is unregulated by the government. These contracts allow two individuals to agree on a price for a product or service and exchange it at a later date without exchanging any money. OTC contracts are most often used in the futures market as a contract agreeing to sell corn at a certain time and price.