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A
security which is not traded on an exchange, usually due to an inability
to meet listing requirements. For such securities, broker/dealers
negotiate directly with one another over computer networks and by
phone, and their activities are monitored by the NASD.
Also called unlisted.
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The NASDAQ is considered to be an OTC market, with the tier 1 being represented by Microsoft and Intel. Be very wary of some OTC stocks, the OTC:BB stocks are either penny stocks or hold bad credit records. |
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