Over-the-counter (OTC) trading in the United States has evolved to function through distinct platforms apart from traditional stock exchanges. One notable entity in this space is the OTC Markets Group (OTCM 0.16%). Unlike securities listed on major exchanges such as the New York Stock Exchange (NYSE) and the Nasdaq, OTC Markets Group provides a public market for securities that do not trade on these prominent exchanges. This alternative marketplace serves as a venue for trading in securities that might not meet the stringent listing requirements of the major exchanges or have chosen not to be listed there for various reasons.
The distinction between the Nasdaq and OTC trading lies in their operational structures and the types of securities they facilitate trading for. While the Nasdaq is a major stock exchange that lists a wide array of publicly traded companies, OTC trading occurs outside of these formal exchanges, often involving securities that are not traded on the Nasdaq or other major exchanges. OTC trading platforms like the OTC Markets Group cater to securities that may not meet the criteria for listing on the Nasdaq or similar exchanges, offering an alternative avenue for investors and issuers.
In summary, the Nasdaq is not an over-the-counter (OTC) platform. Instead, it is a major stock exchange known for listing various publicly traded companies. Conversely, OTC trading takes place outside of formal exchanges like the Nasdaq, facilitated by platforms such as the OTC Markets Group. These platforms provide a marketplace for securities that do not trade on major exchanges, offering an alternative avenue for trading and investment.
(Response: No, Nasdaq is not an OTC platform. It is a major stock exchange. OTC trading occurs outside of formal exchanges like Nasdaq and is facilitated by platforms such as the OTC Markets Group.)