Question

What is over counter market

Answer 1

Ans:

Over-the-counter trading is done directly between two parties, without the supervision of exchange and also called off-exchange.

It has the advantage of possible liquidity and maintaining the current market price.

The OTC market is a decentralized market where the contributor trade directly.

The phrase over the counter refers to capital, that trade through a buyer as opposed to on incorporate trading.

OTC also refers to debt securities and other financial instruments.

Small companies that may not meet the listing requirements for their securities to be listed on national exchanges might turn to the OTC market as an alternative. However, because these companies do not meet listing requirements, they are often considered riskier stocks and are less actively traded than stocks listed on national exchanges. Thus, the bid spread is often larger for OTC securities.