Categories: Stocks

Over The Counter (OTC)

Over-the-counter (OTC) in the stock market means trading unlisted securities through a broker or dealer network as against on a stock exchange like the BSE or NSE where securities are listed. Securities like bonds, futures and options and stocks can be traded through the OTC or Over-the-counter trading channel.

Features of OTC

1. Securities of companies which cannot list on a stock exchange (are not eligible or do not want to) can be traded over the counter, but they are subject to some regulation as per SEBI guidelines.
2. OTC trades are facilitated by a dealer or broker specializing in OTC markets.
3. OTC trading may help to promote equity and financial instruments which are otherwise not available to investors.

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