A tutorial on how to use the OTC desk for manual arbitrage.
To use the OTC Desk for manual arbitrage the following conditions must be met:
- The trader must be trading blocks of ZAR250K or more
- In accordance with South Africa’s Financial Intelligence Centre Act 38 of 2001 (in order to combat money laundering activities and to counter-terrorism financing) OVEX needs to verify your identity and proof of address
- Brokers must have their own forex vehicle for the purchase of foreign currency. Brokers must undertake the full forex portion of the arbitrage trade
AS AN OVEX BROKER YOU HAVE ACCESS TO THE OVEX OTC DESK FOR TRADING ARBITRAGE ON YOUR CLIENTS’ BEHALF. WHAT IS THE PROCESS?
To manually engage in arbitrage via the OVEX OTC Desk – you must undertake the forex leg of arbitrage trades in your own capacity. This means purchasing USD on your clients’ behalf to then buy TUSD directly from OVEX’s UK branch. To do so you will have to individually book SWIFTS for each of your clients through their respective offshore bank accounts. You can then sell this TUSD through the OTC Desk on OVEX’s local SA exchange at the premium. The spread on the TUSD/ZAR sale is identical to that of the BTC/ZAR implied rate.