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OTC
(Over-The-Counter)
OTC (Over-The-Counter) refers to securities traded directly between parties rather than on formal exchanges like the NYSE or NASDAQ. OTC markets include stocks, bonds, derivatives, and commodities that don't meet exchange listing requirements.
OTC trading occurs through dealer networks and electronic platforms, with less regulation and transparency than exchange trading. While some large companies trade OTC (like ADRs), many are smaller or riskier investments. The OTC market includes penny stocks and "pink sheet" securities. Investors should exercise caution with OTC investments due to limited disclosure requirements and higher volatility compared to exchange-listed securities.
OTC trading occurs through dealer networks and electronic platforms, with less regulation and transparency than exchange trading. While some large companies trade OTC (like ADRs), many are smaller or riskier investments. The OTC market includes penny stocks and "pink sheet" securities. Investors should exercise caution with OTC investments due to limited disclosure requirements and higher volatility compared to exchange-listed securities.