Over-the-Counter or OTC

A security that is not listed and traded on an organised stock exchange. It is also a market in which securities transactions are conducted through a telephone and computer network, connecting dealers in stocks and bonds rather than on the floor of an exchange. Securities traded in this manner do not meet the listing requirements of NASDAQ, the New York or the American Stock Exchanges. Rules for trading over-the-counter stocks are written and enforced mainly by the NASD. The basis for the trading are the published Bid/Ask prices of shares printed by National Quotation Bureau, Inc. of New Jersey on pink paper and called "the Pink Sheets." (Also see Bulletin Board and Pink Sheets)