What is OTC? What is OTC market?


In the stock exchange, there are often some professional terms, which are very familiar to the old investors, but they are confused for the new investors. What does the OTC market mean?
What does OTC market mean? OTC (over-the-counter market, also known as the over-the-counter market), OTC refers to the equity transaction conducted in the market outside the stock exchange. The establishment of over-the-counter trading market in China can provide equity trading platform for millions of enterprises that can not meet the listing requirements, which is conducive to the development of small and medium-sized enterprises, and helps to form a multi-level capital market in China.
What does OTC market mean? ——Characteristics of OTC market
OTC mode is based on the credit of both parties of the transaction, and both parties bear the credit risk by themselves, and the transaction can be conducted only after the establishment of bilateral credit; the price of OTC mode is determined by both parties through negotiation, and the fund settlement of OTC mode is arranged by both parties themselves.
In addition to the above, the main characteristics of OTC market are: transaction dispersion, transaction directness and agreement.
Decentralization of OTC market transactions: OTC trading market activities are conducted by several independent securities companies, not by one or a few of the same institutions.
OTC market transaction directness: in the OTC market, most of the transactions are conducted between investors and securities companies.
OTC market transaction agreement: OTC trading is the transfer of securities under the bank, which is carried out in the process of negotiation between securities companies and investors.
What does OTC market mean? ——World famous OTC market
In OTC markets, securities that fail to be listed on stock exchanges include stocks that do not meet the listing standards of stock exchanges, stocks and bonds that meet the listing standards of stock exchanges but are unwilling to be listed on the exchanges.
There are three major markets in the world, such as the stock market of France (CBM), over-the-counter market of France (http://www.cnki.com), etc. There are huge OTC markets in the United States, and the number of securities traded in these markets accounts for about three-quarters of the total volume of securities traded in the United States.
The above is the introduction of what stock OTC means. I believe that through the introduction above, novice investors have a clearer understanding of stock OTC.

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