Definition 1.
The universe of US stocks not traded on any of the major exchanges. OTC stocks are traded by telephone or computer and tend to be newer, smaller and riskier than exchange-listed stocks. They are also more thinly traded. The Pink Sheets, published daily, are used to look up quotations on thousands of these stocks, as well as the names of dealers who make a market in them. It''s much harder for an investor to be sure of getting or paying a fair price in OTC trading, and companies that succeed grow out of OTC and get listed on Nasdaq or another exchange.
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