What is the OTC?
The term “Over-the-Counter” refers to stocks that are not trading on a stock exchange such as the NASDAQ, NYSE or American Stock Exchange (AMEX). Generally companies that trade their stocks on the OTC market cannot meet the requirements to trade on one of the major exchanges. However some strong companies that can trade on the major exchanges choose instead to trade on the OTC market because of the costly fees and regulatory and administrative burden that the major exchanges impose on them. Companies can either trade on the Over-the-Counter Bulletin Board (OTCBB) or the Pink Sheets. Neither of these networks is an exchange, in fact, they describe themselves as providers of pricing information for securities.
