Navigating the Over-The-Counter (OTC) markets can be a daunting task for beginners due to its less regulated and more nuanced nature compared to traditional exchange trading. This guide provides an essential walkthrough to understanding and trading in OTC markets, which encompass a wide range of securities not listed on formal exchanges.
Over-the-counter (OTC) trading and traditional exchange trading are two fundamental methods through which securities and other financial instruments are traded. While they both serve the purpose of facilitating trades, they operate in markedly different environments with distinct advantages and challenges. This guide explores these differences to help investors understand which trading environment may suit their trading strategies better.