Over-the-counter, or OTC, stocks are securities that are traded outside the major exchanges, a part of the stock market sometimes called the pink sheets.
The term over-the-counter refers to the purchase of securities outside an official exchange, sometimes called the pink sheets. Importantly, these trades occur via a broker-dealer network, which operates more like a two-person transaction than a public auction.
While the largest and most well-known companies trade their stock on formal exchanges like the Nasdaq and New York Stock Exchange, or NYSE, thousands of smaller companies publicly trade their shares via over-the-counter markets.
RoboMarkets Blog will tell you more about what is otc stock and the specifics of trading such stocks.