Over-the-Counter (OTC)

This is the process of trading securities through a broker-dealer network as opposed to one that happens via centralized exchange like the New York Stock Exchange. OTC trading may involve stocks, bonds, or derivatives, which are financial contracts that get their value from an underlying asset like a commodity. For companies that do not meet the requirements to list on standard market exchanges like the NYSE, their securities can be traded OTC but may still be subject to some kind of regulation by the Securities and Exchange Commission.

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