Answer:
b. a decentralized market not listed in an exchange.
Step-by-step explanation:
The over-the-counter (OTC) market refers to a decentralized marketplace where financial instruments such as stocks, bonds, commodities, and derivatives are traded directly between two parties, without being listed on a formal exchange. In the OTC market, trades are conducted through dealer networks, electronic systems, or other communication methods, allowing for direct transactions between buyers and sellers.
Unlike stock exchanges where trading occurs on a centralized platform with standardized rules and regulations, the OTC market provides more flexibility and customization in the trading process. It allows for the trading of securities that may not meet the listing requirements of formal exchanges or are not actively traded on exchanges.
One prominent example of the OTC market is the trading of over-the-counter stocks (also known as OTC stocks), which are stocks of companies that are not listed on major exchanges such as the New York Stock Exchange (NYSE) or NASDAQ. Instead, these stocks are traded through dealer networks or electronic platforms.
It's important to note that while the OTC market offers certain advantages such as flexibility and accessibility, it also carries certain risks, including less transparency and regulation compared to exchange-traded markets. Investors should exercise caution and conduct thorough research when participating in OTC trading.