OTC Markets

OTC Markets, or Over-the-Counter Markets, are a type of financial market where securities are traded directly between two parties, without the need for a formal exchange. OTC Markets are typically used for trading stocks, bonds, derivatives, and other financial instruments. OTC Markets are often used by companies that are not listed on a formal exchange, such as the New York Stock Exchange (NYSE) or the Nasdaq. OTC Markets are also used by companies that are listed on an exchange, but are not actively traded on that exchange.

History of OTC Markets

OTC Markets have been around since the early 1900s, when they were used to trade stocks and bonds. In the 1970s, the OTC Markets began to expand to include derivatives and other financial instruments. By the 1980s, OTC Markets had become a major source of liquidity for companies that were not listed on a formal exchange. Today, OTC Markets are used by companies of all sizes, from small start-ups to large multinational corporations.

Comparison of OTC Markets and Formal Exchanges

Summary

OTC Markets are a type of financial market where securities are traded directly between two parties, without the need for a formal exchange. OTC Markets are often used by companies that are not listed on a formal exchange, such as the NYSE or the Nasdaq. OTC Markets have been around since the early 1900s, and today they are used by companies of all sizes. Compared to formal exchanges, OTC Markets have lower liquidity and lower transaction costs. For more information about OTC Markets, visit the websites of the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).

See Also

• Securities
• Derivatives
• Financial Instruments
• NYSE
• Nasdaq
• FINRA
• SEC
• Bonds
• Stocks
• Exchanges

Do you like the post? Share it now: