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Describing a security or trade that does not occur on an exchange. Very often, the OTC market includes securities that 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.
The trading of a security on the floor of an exchange when the security is not listed on that exchange. Unlisted trading occurs when members of an exchange wish to trade the security but the issuing company has not applied for listing. Unlisted trading requires approval of the SEC.