I understand an OTC means trading through a decentralised network. All forex as far as i know use OTC?
Would this mean that regardless if the broker is a market marker or no dealing desk broker they are always going to be an OTC?
Or since Market Makers are your counterparty, they set their own prices so in effect, they centralise themselves meaning they are not OTC?
In simple terms, OTC means the process of how securities are traded for companies not listed on a formal exchange. These securities are traded via a dealer network as opposed to on a centralized exchange.
As you might already know, OTC stands for over the counter. Talking about it in trading terms, I would like to clear that it is the name given to trading through decentralised dealer networks. The exact opposite of OTC trading is the exchange trading where trades take place via a centralised exchange.
Now that’s a tricky one here. Of what I know, as an investor, you need to be careful while investing in highly speculative OTC securities. The reason behind this is that the filing requirements between the listing platforms may vary. There is certain mandatory information required like the business financials that can be hard to locate.