Definitions (2)

1. OTC. A security which is not traded on an exchange, usually due to an inability to meet listing requirements. For such securities, broker/dealers negotiate directly with one another over computer networks and by phone, and their activities are monitored by the NASD. OTC stocks are usually very risky since they are the stocks that are not considered large or stable enough to trade on a major exchange. They also tend to trade infrequently, making the bid-ask spread larger. Also, research about these stocks is more difficult to obtain.
also called unlisted.
2. The computer and phone system through which over the counter (as well as listed) securities are traded.

Use Over-the-Counter in a sentence

You may want to offer some of your drugs over-the-counter so that you can have a much bigger customer base.

​ Was this Helpful? YES  NO 5 people found this helpful.

I bought a lot of over-the-counter medications that had a very long shelf life and would not die away and be out of use.

​ Was this Helpful? YES  NO 5 people found this helpful.

The over-the-counter nature of the security's transactions were convenient as contacting a broker and a proper exchange was too troublesome.

​ Was this Helpful? YES  NO 8 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
National Association of Securities Dealers Automated Quotations system NSTA