Over The Counter Stock (Noun)
Meaning
Stock that is not listed and traded on an organized exchange.
Classification
Nouns denoting possession and transfer of possession.
Examples
- Due to increased regulations, many companies now issue stock as over-the-counter stock to avoid rigorous financial reporting requirements.
- Over-the-counter stock often poses higher risks for investors who can't easily rely on the data from official exchanges to make informed decisions.
- Although over-the-counter stock trades are not formally registered, companies can choose to publicly report their financial information voluntarily.
- There are some benefits for smaller firms that go the over-the-counter stock route, especially considering listing requirements can be quite expensive.
- Since the over-the-counter stock market operates without a centralized trading system, quotes on shares can vary depending on the brokerages used.