OTC Trading: What Does It Mean? Over-the-counter (OTC) trading is a decentralized method of trading financial instruments, such as stocks, currencies, bonds, and derivatives, directly between parties without the oversight of a centralized exchange.

The Over-The-Counter (OTC) Market refers to a decentralized marketplace where financial instruments, such as stocks, bonds, derivatives, and commodities, are traded directly between two parties without the oversight of a centralized exchange.

Over-the-counter, also known as OTC trading, is the way of buying and selling financial instruments via decentralised networks. Anyone that’s traded cryptocurrencies such as Bitcoin will have heard of the term decentralised. The fundamental concept of decentralisation is the same way to OTC trading.

Over-the-counter (OTC) securities are securities that are not listed on a major exchange in the United States and are instead traded via a broker-dealer network, usually because many are smaller companies and do not meet the requirements to be listed on a national exchange.