Over-the-Counter (OTC) Markets

Over-the-Counter (OTC) markets are decentralized trading platforms where financial instruments like stocks, bonds, or derivatives are bought and sold directly between parties, often through a network of dealers rather than a centralized exchange. This allows for flexible trading of securities not listed on formal exchanges and often involves customized contracts. OTC markets are typically used for smaller, less liquid, or more specialized securities, offering investors greater accessibility but potentially higher risk due to less regulatory oversight. Essentially, OTC trading involves direct negotiations, making it more personalized but also more complex than conventional exchange trading.