Exploring the World of Unlisted Securities: Understanding OTC Markets and Risks Involved

where do unlisted securities trade?

otc market

Unlisted securities are securities that are not traded on the stock exchanges. These securities do not meet the listing requirements of the stock exchanges, and so they are not traded on a regulated exchange.

Instead, unlisted securities are traded in over-the-counter (OTC) markets, also known as decentralized markets. These markets do not have a physical trading floor or a central exchange. The trades take place over-the-counter through a network of dealers and brokers who negotiate the terms of the transaction directly with each other.

OTC markets provide liquidity to unlisted securities, offering investors an opportunity to buy and sell securities that are not available on the stock exchanges. However, OTC trading is generally less transparent and less regulated than trading on the stock exchanges, and investors may face higher risks of fraud and volatility. As a result, investors in unlisted securities need to conduct thorough due diligence and consider the risks involved before making any investment decisions.

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