Mar 14 2011

What is an OTC stock?

Category: Finance

Answer:

OTC stands for “over the counter”. An OTC stock or unlisted stock does not have enough equity to be eligible for a listing on a typical exchange like the Nasdaq or NYSE. OTC Dealers will often trade directly with each other over a separate bulletin board (OTCBB) network. In general, an OTC stock is riskier than most exchange listed stocks due to lack of information and liquidity. Penny stocks are usually OTC stocks.


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