---
title: "What is the \"Over the Counter Marke\"?"  
description: "What is the \"Over the Counter Marke\"?"  
author: "nitya singh"  
published: 2018-02-27  
canonical: https://answers.mindstick.com/qa/35099/what-is-the-over-the-counter-marke  
category: "share market"  
tags: ["share market"]  
reading_time: 2 minutes  

---

# What is the "Over the Counter Marke"?

## Answers

### Answer by Shriyam Srivastava

**Over-the-counter-[market](https://www.mindstick.com/articles/329163/how-to-expand-your-business-in-global-markets)** is the type of market where two participating parties could trade stocks, securities, currencies, etc. without the requirement of an agent/a broker. One good thing about OTC is that they do not have auction offices or physical offices. The deals could be made [online](https://www.mindstick.com/articles/12410/how-can-online-leads-lift-your-roi) through electronic medium.

![What is the 'Over the Counter Marke'?](https://answers.mindstick.com/questionanswer/1ca99f86-5985-4475-8cd4-5e510ea49dbc/images/12c7475b-e1f0-4df8-b724-8ffc4b60824a.jpeg)\

In an OTC market, dealers act as market-makers by quoting prices at which they will buy and sell a [security](https://www.mindstick.com/articles/1671/wcf-security-in-dot-net-technology-using-c-sharp), [currency](https://www.mindstick.com/news/2105/rbi-has-released-a-concept-note-on-central-bank-digital-currency-and-digital-rupee), or other financial [products](https://www.mindstick.com/news/2358/apple-will-use-us-made-semiconductors-in-its-products-to-lessen-its-dependency-on-asia). ***Some of the products most commonly traded over-the-counter include bonds, derivatives, structured products, and currencies.***

Sometimes the securities being traded do not have sufficient buyers or sellers . As a result, the value of a security may vary widely depending on which market trade the stock. There is a **lack of liquidity in OTC market** which creates a problem of [selling](https://www.mindstick.com/news/2306/ccpa-fined-amazon-seller-cloudtail-india-for-selling-cookware-outside-of-bis-standards) the stocks overseas.

## Risks and problems:

- **Lack of Liquidity**
- **Twists and turns associated with [payments](https://www.mindstick.com/news/2458/elon-musk-claims-that-twitter-will-introduce-encrypted-direct-messages-and-payments):** Sometimes the buyer or the seller deny to make the required [payment](https://www.mindstick.com/blog/300135/ways-fast-payments-changed-the-world) after the deal has been struck.
- **Lack of [Transparency](https://www.mindstick.com/articles/336962/how-blockchain-technology-be-applied-to-improve-transparency-in-industries):** A trade can be executed between two participants without others being aware of the price at which the [transaction](https://www.mindstick.com/blog/11670/transactions-and-injections-in-sqlite) was completed. Thus, making The OTC market less regulated and transparent.

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Original Source: https://answers.mindstick.com/qa/35099/what-is-the-over-the-counter-marke

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