# Capital & Execution Risks Manual trade execution in OTC markets creates **operational and financial burdens** for both buyers and sellers. Transactions often require **significant collateral, prolonged settlement times, and reliance on manual enforcement**, increasing the risk of disputes, manipulation, or failed deliveries. * **High escrow/collateral requirements** – Traders must lock up additional capital to execute deals. * **Manual trade execution** – Sellers must manually facilitate trades, increasing the risk of manipulation, settlement failures, and operational burdens. * **Settlement Risks in Off-Chain OTC Trades** – Without on-chain enforcement, OTC deals rely on legal agreements and manual settlement. This leads to risks such as **non-delivery, delayed transfers, or payment failures**, leaving both buyers and sellers vulnerable. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.secondswap.io/getting-started/locked-tokens-a-liquidity-problem-in-defi/capital-and-execution-risks.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.