over-the-counter (OTC) trading

Over-the-counter (OTC) trading refers to buying and selling financial instruments directly between parties, outside of formal exchanges like the NYSE or NASDAQ. These trades are typically negotiated privately, often through dealers or brokers, and can include stocks not listed on major exchanges, bonds, commodities, or derivatives. OTC trading provides flexibility, allowing investors to access a wider range of assets and tailor agreements, but it may also involve higher risks and less transparency compared to exchange-traded securities. It is commonly used for less liquid or more specialized financial products.