What Is Stock Exchange

What Is Stock Exchange

If a stock does not trade on a listed exchange, it can still trade in the over the counter (OTC) market, which is a less formal and less regulated venue. These OTC-traded shares typically will involve smaller (and riskier) companies, such as penny stocks, since they may not meet the listing requirements for established stock exchanges. Many giant blue-chip stocks, such as Berkshire Hathaway, at one time traded on the over-the-counter market before migrating to the so-called "Big Board," or New York Stock Exchange (NYSE).