What is meant by OTC?

Categories >> Business Management >> Banking Finance
Suggest New Category

Question Posted / nandu

10 Answers
18591 Views
I also Faced
E-Mail Answers

Answers were Sorted based on User's Feedback

What is meant by OTC?..

Answer / chutke amresh

Over-the-counter (OTC) trading is to trade financial
instruments such as stocks, bonds, or derivatives directly
between two parties. It is the opposite of exchange trading
which occurs on futures exchanges or stock exchanges.

An over-the-counter (OTC) contract is a bi-lateral contract
in which two parties agree on how a particular trade or
agreement is to be settled in the future. For derivatives,
these agreements are usually governed by an International
Swaps and Derivatives Association agreement.

An over-the-counter (OTC) market is a financial market
where products are traded over-the-counter.

Is This Answer Correct ?

13 Yes

3 No

What is meant by OTC?..

Answer / leela

A security traded in some context other than on a formal
exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-
the-counter" can be used to refer to stocks that trade via
a dealer network as opposed to on a centralized exchange.
It also refers to debt securities and other financial
instruments such as derivatives, which are traded through a
dealer network.

Is This Answer Correct ?

2 Yes

0 No

What is meant by OTC?..

Answer / vandana gupta

Over-the-Counter. A security which is not traded on an
exchange, usually due to an inability to meet listing
requirements

Is This Answer Correct ?

2 Yes

0 No

What is meant by OTC?..

Answer / jithender

OTC Means Over The Counter Exchange.The stocks which are
not traded on the Standard Exchanges Such as BSE & NSE are
traded on OTC.

Is This Answer Correct ?

1 Yes

0 No

What is meant by OTC?..

Answer / mallesh

financial instruments which are nit listed in stock
exechanges are traded in otcei

Is This Answer Correct ?

1 Yes

1 No

What is meant by OTC?..

Answer / prince

OTC mean Over-The_Counter.A stock that is traded through a
network of brokers instead of a centralized exchange stocks
are often from very small public companies or companies on
foreign exchanges

Is This Answer Correct ?

0 Yes

0 No

What is meant by OTC?..

Answer / thara

refer to stocks that trade via a dealer network as opposed
to on a centralized exchange. It also refers to debt
securities and other financial instruments such as
derivatives, which are traded through a dealer network.

In general, the reason for which a stock is traded
over-the-counter is usually because the company is small,
making it unable to meet exchange listing requirements. Also
known as "unlisted stock", these securities are traded by
broker-dealers who negotiate directly with one another over
computer networks and by phone.

Although Nasdaq operates as a dealer network, Nasdaq stocks
are generally not classified as OTC because the Nasdaq is
considered a stock exchange. As such, OTC stocks are
generally unlisted stocks which trade on the Over the
Counter Bulletin Board (OTCBB) or on the pink sheets. Be
very wary of some OTC stocks, however; the OTCBB stocks are
either penny stocks or are offered by companies with bad
credit records.

Instruments such as bonds do not trade on a formal exchange
and are, therefore, also considered OTC securities. Most
debt instruments are traded by investment banks making
markets for specific issues. If an investor wants to buy or
sell a bond, he or she must call the bank that makes the
market in that bond and asks for quotes.