Over-the-Counter

over-the-counter (OTC)

A decentralized market (as opposed to an exchange market) where geographically dispersed dealers are linked by telephones and computer screens. The market is for securities not listed on a stock or bond exchange. The NASDAQ market is an OTC market for US stocks. Antithesis of listed.

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Over-the-Counter

Describing a security or trade that does not occur on an exchange. Very often, OTC stocks are very small and do not trade on an exchange because they do not meet market capitalization requirements. OTC securities may theoretically be traded informally (one may stand on a street corner and sell his/her stocks), but the term usually refers to securities traded through a dealer network.

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Over-the-counter (OTC). Securities that trade over-the-counter (OTC) are not listed on an organized stock exchange, such as the New York Stock Exchange (NYSE) or the Nasdaq Stock Market.

Common stocks, corporate, government, and municipal bonds (munis), money market instruments, and other products, such as forward contracts and certain options, may trade OTC.

Generally speaking, the OTC market is a negotiated market conducted between brokers and dealers using telephone and computer networks.