What's an Otc Stock?

Over-the-counter (OTC) securities are traded directly between counterparties without being listed on an exchange. Securities that are traded over-the-counter may be facilitated by a dealer or broker specializing in OTC markets. ... Companies with OTC shares may raise capital through the sale of stock.

Is it safe to buy OTC stocks?

With the exception of some large foreign firms, investors should generally avoid stocks that trade over-the-counter. Penny stocks – those that trade for low prices, often less than a dollar per share – are dangerous. ... Call them penny stocks, microcaps or OTC stocks; by any name, they're bad news.

What is considered an OTC stock?

OTC (over the counter) is the stock market version of "for sale by owner." It's a process by which stocks, bonds, and other financial instruments are traded directly between two parties instead of on a public stock market, such as the New York Stock Exchange (NYSE) or Nasdaq.