Over-the-Counter (OTC) Market

The Over-the-Counter (OTC) market is a decentralized marketplace where securities, such as stocks, bonds, or derivatives, are traded directly between parties without a central exchange like the NYSE or Nasdaq. Transactions occur through dealer networks and electronic platforms, providing flexibility for trading a wide range of financial instruments, including those not listed on formal exchanges. OTC trading often involves smaller or riskier companies, or specialized products, offering more customization but also potentially higher risks. It is regulated but less strictly than exchanges, making it suitable for certain investors and types of securities.