If I decide to trade OTC derivatives, I take on counterparty risk. Since the transaction is not overseen by a clearing house/firm, I accept the risk that the counterparty may not honour the obligation.
What is the 'extra' reward that I get for taking the 'extra' risk? Just the fact that the lot size is customizable (i.e less than 100 shares/lot)? Just wondering if there are other rewards because this clearly does not justify the risk