What are the differences between over-the-counter trades and stock-exchange trades?
A. To be traded on an exchange such as the New York Stock Exchange or the American Stock Exchange, the issuing company must meet the exchange’s listing standards; these may include requirements on the company’s assets, number of shares publicly held, and number of stockholders. Organized markets for other instruments, including standardized options, impose similar restrictions. Many securities are not traded on an exchange but are said to be traded over the counter (OTC) through a large network of securities brokers and dealers. In the National Association of Securities Dealers’ Automated Quotation System (NASDAQ), operated by the National Association of Securities Dealers (NASD), trading in OTC stocks is accomplished through on-line computer listings of bid and asked prices and completed transactions. Like the exchanges, NASDAQ has certain listing standards which must be met for securities to be traded in that market.
To be traded on an exchange such as the New York Stock Exchange or the American Stock Exchange, the issuing company must meet the exchange’s listing standards; these may include requirements on the company’s assets, number of shares publicly held, and number of stockholders. Organized markets for other instruments, including standardized options, impose similar restrictions. Many securities are not traded on an exchange but are said to be traded over the counter (OTC) through a large network of securities brokers and dealers. In the National Association of Securities Dealers’ Automated Quotation System (NASDAQ), operated by the National Association of Securities Dealers (NASD), trading in OTC stocks is accomplished through on-line computer listings of bid and asked prices and completed transactions. Like the exchanges, NASDAQ has certain listing standards which must be met for securities to be traded in that market. Investors who buy or sell securities on an exchange or over the counte
