Over-the-counter (OTC) is a market where dealers trade securities directly with each other, rather than through traditional broker or centralized exchange. The OTC market is made up of a network of dealers who agree to trade with each other. This type of market typically has less regulation and transparency than centralized exchanges, which can lead to more volatility. This includes stocks, bonds, and derivatives. OTC securities are typically traded between institutional investors and/or high net worth individuals.