Over-the-Counter (OTC) Trading

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Over-the-Counter (OTC) Trading

What is Over-the-Counter (OTC) Trading?

Trade that takes place directly between two parties without the oversight of an exchange is known as over-the-counter (OTC), off-exchange, or pink sheet trading. Stocks, bonds, and derivatives, financial contracts whose value is derived from an underlying asset like a commodity, can all be traded over the counter.

Securities of companies that do not fit the criteria to list on a normal market exchange, such as the NYSE, can still be traded OTC but may still be subject to Securities and Exchange Commission regulation.

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