over-the-counter market (OTC) business definition

A widespread aggregation of dealers who make markets in many different securities. Unlike an organized exchange on which trading takes place at one physical location, OTC trading occurs through telephone or computer negotiations between buyers and sellers. Although stocks traded over the counter are often more speculative than listed stocks, virtually all government and municipal bonds and most corporate bonds are traded in the OTC market. See also OTC Bulletin Board, third market.