The over-the-counter market is abbreviated as OTC. It refers to a decentralized market for unlisted securities that do not have a physical presence. It involves firms and persons participating in trading directly negotiating using a communication network such as telephone lines, emails, computer terminals, and other means. Since there is no common exchange, over-the-counter trading’s other name is off-exchange trade. In a general sense, companies that do not meet the stock exchange's requirements for listing their stocks trade them over-the-counter. The transaction occurs between two businesses or financial entities. Bonds, derivatives, currencies, and other financial instruments are mostly traded over-the-counter (OTC). It pertains to a dealer's market where they buy and sell financial products for their accounts. While investors can contact the dealers directly in case they have an interest in selling their stocks or bonds.

Over-the-counter (OTC) refers to the trading of financial instruments directly between two parties, without the use of an organized exchange. In OTC markets, trades are executed through decentralized dealer networks rather than centralized exchanges like the NYSE or NASDAQ. This allows for more flexibility in terms of pricing, contract terms, and access, especially for non-standardized or less liquid assets like derivatives, bonds, or certain commodities. OTC transactions can involve stocks, currencies, and other financial products. One advantage of OTC trading is that it enables the parties involved to tailor their agreements to their specific needs. However, because OTC markets are less regulated, they carry higher counterparty risk, meaning there's a greater chance one party could default on the agreement.