Business and Personal Finance Dictionary

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• OVER THE COUNTER (OTC)
  
  The majority of stocks in the US are traded over the counter, rather than on the floor of an organized stock exchange. That number includes more than 5,000 stocks that are listed on the Nasdaq Stock Market (Nasdaq) and are part of the National Market System (NMS), as well as stock in companies too small to meet stock market listing requirements. In actual practice, OTC trading is done through a telephone and computer network. A number of companies that qualify for exchange listing have chosen to continue to trade OTC because they prefer the network of dealers to the centralized system typical of a large exchange. Government and municipal bonds (munis) are also traded OTC.
  
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