What is an off-book trade?
An ‘off-book’ trade refers to the process of trading shares away from an exchange or regulated body. They are usually executed via the over-the-counter (OTC) market. Off-book transactions are made directly between two parties, outside or ‘off’ of the order books.
Once a price has been agreed between the two parties, it is typical for one of the participants to report the trade and its parameters to the exchange – and wider market – in order to bring the execution 'on exchange'.
When you trade on exchange, the trade takes place directly onto the order book and is seen as increasing visibility for wider market participants.