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Learning to Invest / Terms, Definitions, & Jargon


Subject:  Re: What IS OTC Date:  12/9/1999  10:38 AM
Author:  oldanalog Number:  449 of 2244

OTC refers to Over-the-Counter stock trading. About a million years ago (when I was 20) many securities were literally traded over the counters in stores of various dealers from an physical inventory of securities. These stocks were generally those of small or new companies who for one reason or another could not (or did not not desire to) trade on one of the major exchanges. The OTC market was also a convenience for large institutions who wished to avoid the financial disclosures required by the large exchanges.

Ironically, this relatively low-tech, slow tempo approach to securities trading bloomed into a national symbol for all that is high-tech when in 1971 OTC quotes began to be posted on the National Association of Securities Dealers Automatic Quotations System (the NASDAQ).

By the way if you go to Message 1 of this board, there is a post by TMFTwitty (24March99 12:05) that has links to a half-dozen or so financial dictionaries and glossaries. I found it accidentally the first time I visited this board, maybe you've found it already.
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