The Over-the-Counter (OTC) market is a decentralized market where financial assets are traded directly between two parties, without the supervision of a centralized stock exchange. In this market, transactions are conducted directly between buyers and sellers through electronic means, phone, or other communication channels. Financial assets traded in the OTC market include stocks of companies not listed on traditional stock exchanges, corporate bonds, financial derivatives, foreign currencies, structured products, and other financial instruments.

A distinctive feature of the OTC market is the flexibility and customization it offers to participants, as transactions can be tailored to the specific needs of the parties involved. Unlike regulated stock exchanges, the OTC market does not have strict disclosure requirements or regulatory compliance, which can result in greater agility in trading financial assets.

However, the lack of centralized regulation in the OTC market also poses certain risks, such as lack of price transparency, potential counterparty default, and lower liquidity compared to regulated markets. Therefore, it is crucial for participants in the OTC market to have a deep understanding of the financial assets they trade, as well as solid risk management strategies and monitoring systems to mitigate potential risks.

In summary, the OTC market is a dynamic and diverse environment that offers alternative investment and financing opportunities to traditional markets, but also requires a careful and diligent approach from participants to effectively manage the risks associated with trading financial assets outside conventional stock exchanges.