Over-the-Counter (OTC)

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Over-the-Counter (OTC)

What is Over-the-Counter (OTC)?

An over-the-counter (OTC) market is a decentralized market where participants trade stocks, currencies, commodities, or other instruments directly between two parties and without a central exchange or broker. Since there are no physical sites for over-the-counter markets, trading is done online. Comparing this to an auction market structure is completely different.

By quoting prices at which they will purchase and sell a security, currency, or other financial instruments, dealers serve as market makers in an OTC market. In an OTC market, a trade can be made between two parties without others (i.e exchanges) being aware of the price at which the deal was made.


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