1 thought on “What is OTC”

  1. OTC (overseas trading market, also known as counter trading market), counter trading refers to equity transactions conducted on the market outside the stock exchange.
    The establishment of a counter trading market in my country can provide equity trading platforms for millions of companies that fail to meet the listing conditions, which is conducive to the development of small and medium -sized enterprises, and it also helps my country to form a multi -level capital market. The full English name Over-The-, Chinese translation is the counter market.
    otc does not have a fixed place, there is no prescribed member qualification, no strict controllable rules, no specified transaction products and restrictions, mainly one -to -one transactions conducted by the opponent through private negotiation. Overseas transactions are mainly developed in the financial industry, especially financial institutions such as banks. At present, the largest OTC market is in Singapore. In addition to providing various foreign exchange, index and futures transactions, there are also reference indexes of JP Morgan Stanley, Taiwan, Hong Kong and other reference indexs for investment.
    The expansion information:
    . Unique features:
    (1) Overseas trading market is a decentralized intangible market. It does not have a fixed and concentrated trading venue, but is traded by many independent securities business institutions, and mainly rely on telephone, telegraph, fax, and computer networks to contact the transaction.
    (2) Organizational methods of the overseas trading market adopt a market business. The difference between the off -site trading market and the Stock Exchange is that it does not adopt a brokerage system and investors directly trade with the securities dealers.
    (3) Overseas trading market is a market that has many types of securities types and securities operating institutions, mainly for stocks and bonds that fail to approve listed on the stock exchange. Due to the variety of securities types, each securities operating agency only operates several types of securities.
    (4) Overseas trading market is a market that conducts securities transactions in a bargaining method. In the overseas trading market, securities trading adopts one -to -one transaction method. It is impossible for many buyers and sellers to buy and sell the same securities at the same time, and there is no open bidding mechanism. The price decision -making mechanism in the off -site trading market is not public bidding, but to negotiate bargaining between the buyers and sellers. Specifically, it is the securities company hanging out the purchase price and selling price of the securities that the securities it operates. On the basis of the negotiation of both parties, the net price does not include commissions. Brokers can adjust the price of the card at any time according to the market conditions.
    (5) The management of the overseas trading market is loose than the stock exchange. Due to the dispersion of the overseas trading market, the lack of unified organizations and regulations, it is not easy to manage and supervise, and its transaction efficiency is not as good as the stock exchange. However, the NASDAQ market in the United States will use computers to be scattered in the overseas trading market across the country to form a network, which has greatly improved management and efficiency.
    . Participating objects:
    In abroad, participants in the overseas trading market are mainly securities companies and investors. The securities dealers participating in off -site transactions include:
    (1) Member securities dealers, that is, members of the Stock Exchange set up an organization to operate off -site trading business.
    (2) Non -member securities dealers, or counter securities dealers, they are not members of the stock exchange, but they are approved to establish securities business institutions, focusing on buying and selling unlisted securities and bonds.
    (3) Securities underwriters, that is, financial institutions that specialize in newly issued new securities, and some countries newly issued securities are mainly sold on -site markets.
    (4) Full -time buying and selling government bonds or local government bonds and local public group bonds, etc.

Leave a Comment

Shopping Cart