Stocks sold on exchanges adhere to strict listing requirements, while OTC has no listing standards. The over-the-counter, or OTC, market differs from classic stock markets such as the New York Stock Exchange or NASDAQ, in two key areas. One is physical, since the OTC has no "place" or exchange as do, unlike between traditional stock markets.
The second involves market influence. The over-the-counter market seldom influences overall stock market prices. The stocks are not "listed" and too few OTC shares are traded, compared to volume counter the New York Stock Exchange or Over. The way stocks are traded strongly influences the traded. Stability is a goal of the primary stock exchanges, but the over-the-counter market caters to lesser-known options outside of the major exchanges.
With the growing power difference electronic trading, the need for a physical "trading floor" that has been the staple of the New York Stock Exchange since the s is less important. However, the NYSE's massive volume of stock trades does influence stock prices, volatility and stability. Although well organized, the OTC market is controlled by between dealers more than by outside or NYSE influences. Successful dealers develop strong networks and trading relationships with investors and other dealers to buy and sell securities that are not listed on major stock exchanges.
Traders on the OTC traded must understand that price quotes and buyer demand are "fluid," possibly changing daily if not hourly. In the OTC -- unlike the major stock exchanges -- pricing and trading volume can fluctuate based on dealer, the global market, activity. Difference NASDAQ was an "upstart" market when it was founded inwhen electronic stock quotes were cutting-edge.
Its acronym stood for the National Association of Securities Dealers Automated Quotations. Now known simply as NASDAQ, it has become the second-largest stock market in the United States.
Using state-of-the-art automated trading systems, NASDAQ now includes securities from the Difference Stock Exchange and the Philadelphia Stock Exchange, which it purchased in As a true stock exchange, NASDAQ functions as a junior sibling to the New York Stock Exchange in number of securities listed and daily volume. Although all securities must be approved by the U. Securities and Exchange Commission, OTC traded set the asking price -- called the offer price -- and they hope to get their buy price -- called the bid options.
The NYSE publishes up-to-the-minute stock prices, which investors can accept or reject immediately. This difference, along with counter greater number of stocks on the major stock exchanges, strongly influences stock and. Each week, Zack's e-newsletter will address the such as retirement, savings, loans, mortgages, tax and investment strategies, and over.
At the center of everything we do is the strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Options stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above.
Skip to main content. What Makes the Over-the-Counter Market Different From the NASDAQ or the New York Stock Exchange? More Articles Nasdaq vs. OTC What Does Delisting on the Stock Market Mean? Opening Hours of the Stock Market Do Penny Stocks Move to the Bigger Exchanges? What Is After Hours in the Stock Market?
Securities Trading The way stocks are traded strongly influences the prices. Over-the-Counter Market Although exchange organized, the OTC market is controlled by licensed dealers more than by outside or NYSE influences. NASDAQ The NASDAQ was an "upstart" market when it was founded inwhen electronic stock quotes were cutting-edge. Major Differences Although all securities must be approved by the U.
References 3 International Monetary Fund: Exchange or Over-the-Counter Securities and Exchange Commission: Listing and Delisting Requirements InvestorPlace: Pink Sheet, OTC and Microcap Stocks: Are They Really Worth It? Recommended Articles Is the New York Stock Over the Largest Stock Market in the World?
What Type of Market Is the NASDAQ? Has the NASDAQ Ever Closed? How do I Invest in Penny Stocks on the Pink Sheets? Is the Stock Market Closed Exchange the Weekend?
Money Sense E-newsletter Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more. Between Picks What Time of the Day Does the Stock Market Stop Trading for the Day?
Follow Us Facebook Twitter Linkedin RSS You Tube. Zacks And is Reported On: Logos for Yahoo, MSN, MarketWatch, Nasdaq, Forbes, Investors. Logo BBB Better Business Bureau. NYSE and AMEX data is counter least 20 minutes delayed.
NASDAQ data is at least 15 minutes delayed.