What is OTC platform?
OTC (Over The Counter) is an over-the-counter market. Today the OTC is one of the largest exchanges. Its main feature is trading directly between two parties without a central counterparty. Market participants trade over the phone, or via Bloomberg-terminal. In the OTC trading market there are not only reliable issuers, but also high-risk instruments about which there is practically no information in the public domain. In such a situation, a competent risk assessment of an OTC transaction is extremely important.
What are the differences between the OTC market and the exchange (stock) market?
The OTC market does not have a permanent location. This differs from the London Stock Exchange (LSE), which occupies an imposing building in the center of London. The OTC market is controlled by those who trade on it. They set the prices at which they wish to sell and buy. There is no physical location for the transaction: traders sell and buy by phone, e-mail or even instant messaging.
How the OTC market works?
Trading on the OTC market is done as follows: the parties directly communicate with each other without going to the exchange. Traders negotiate trades by phone, e-mail and through their own trading systems.