Over the counter (OTC)
Many transactions are done privately between counter parties and with no exchange involved.These are known as over the counter, or OTC.
Deals in any security can be done in two ways. One is via a regulated public market such as the London Stock Exchange. But many transactions are done privately between counter parties and with no exchange involved. These are known as over the counter, or OTC.
OTC deals have a number of advantages for each party, including the fact that details of the trade are not published. Furthermore, in many markets OTC deals are subject to less regulatory scrutiny as they are not generally open to the investing public.
However, OTC deals also have their critics, who complain that the existence of 'dark pools of liquidity' large deals being done regularly off-exchange exclude private investors from the best trades.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
See Tim Bennett's video tutorial: What is an index?
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
House prices rising fastest in areas with highest crime rates – where does your area rank?
Property prices are higher in safer areas but growing more slowly than in places benefiting from gentrification and buy-to-lets
-
State pension age review launched – could it rise faster in future?
The government has announced a review of the state pension age, after it warned of a “retirement crisis” and revived the Pensions Commission to boost pension savings