One-Time Password

A One-Time Password is a password that is valid for only one login session or transaction, typically generated by an algorithm or a hardware token. By ensuring that a password cannot be reused, OTPs significantly reduce the risk of replay attacks, where an attacker captures a password and attempts to use it later.

In the context of financial derivatives, OTPs are a standard component of multi-factor authentication, providing a time-sensitive security layer for account logins and sensitive operations like withdrawals. The codes are often generated based on the current time or a shared secret, ensuring that they are synchronized between the user device and the server.

This provides a dynamic and highly secure method of verification that protects against both credential theft and social engineering, as the code becomes useless almost immediately after use.