Over-The-Counter (OTC)
📈 Investing
Quick Definition
Over-the-counter (OTC) refers to the process of trading securities for companies that are not listed on a formal exchange. Transactions occur via a broker-dealer network as opposed to a centralized exchange.
Examples
- 1Trading of small or micro-cap stocks that are not listed on major stock exchanges.
- 2Foreign exchange transactions, where currencies are traded directly between parties without a central exchange.
- 3The purchase of certain derivatives like swaps, which are customized contracts traded directly between parties.
Tags
OTCtradingstocksforexderivatives
Related Terms
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Equity
Equity represents ownership value in an asset or a company, typically expressed as the difference between the asset's value and the liabilities associated with it.
Stock Market
The stock market is a collection of markets where stocks (shares of ownership in businesses) are bought, sold, and issued, reflecting the economic trends and the performance of companies.
Quick Info
Category:Investing
Difficulty:intermediate
Last Updated:6/20/2025