OTC (Over-The-Counter) market is decentralized market where financial assets are traded. Decentralized market means a contrast to the exchange trading. OTC market doesn’t have one place (no physical, no virtual) and is made of many participants. OTC contracts are made between two parties and a forward is perfect example of it.
In simple words to OTC market belong any transactions that aren’t completed in stock exchange (centralized market). For example, if you sell some tangible investment to your friend at conditions you both agreed, it is an OTC market deal.
That’s why OTC market is hard to describe, because it is endless and can be anywhere. It is almost impossible to mention all OTC markets. But the main OTC markets in investment markets are those that are created by the biggest investment firms that trade in between and with their clients.
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