An Over-the-Counter stock, also known under the acronym OTC, is a security that does not trade on a regulated, centralised exchange like the New York Stock Exchange. 


Rather, it trades on a broker-dealer network which can be considered less liquid and transparent than the stock exchanges. Typically, companies list on an OTC market because they do not meet the minimum requirements to list on a regulated exchange like the New York Stock Exchange. 


Since OTC markets can be less liquid than the regulated markets investing in these types of markets comes with higher risks.