The Basics: What Is the Over-the-Counter Market?

Posted on May 31, 2012 | Investing

“Over-the-counter,” or OTC, is a term loosely applied to securities that aren’t listed on an organized exchange—such as the New York, American, Midwest, Boston, Pacific or Philadelphia exchange. OTC securities are traded through at least two, but often numerous “market makers” who maintain bids and offers for the securities they trade. Securities that trade on a listed exchange are quoted by a solo “specialist” who is charged with maintaining orderly trading in a security.

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