Where do you buy "OTC" stocks? I may be naive but OTC means over the counter.

I am confused as to where to purchase such stocks?

2 Answers 2


Over The (dealer's) Counter [OTC] instruments, which includes shares, can only be bought from a participating dealer. These dealers are usually large brokerages or banks but, in the case of a small firm that is not yet publicly traded, may be through the firm itself or through an acting accountant or designated professional. It is normally expensive to buy and sell these instruments as the cost of a transaction, including commissions, is closely related to liquidity and these instruments have little to no liquidity.

  • As noted, it's often expensive - but the advantage is that it's more consistent when dealing with large amounts. Try to buy or sell $10m worth of stocks at once and, for most companies, you'll find the price changes quite dramatically (making part of your buy more expensive, or sell cheaper) and you can introduce panic or turbulence to the price due to your unusual activity. OTC alleviates that, and allows you to buy at a fixed price without unduly influencing the market. The dealer will typically replenish/dump their own holding more gradually than you would have been able to
    – Jon Story
    Commented Jul 11, 2018 at 14:21
  • @JonStory or you could just use your dealer's (guaranteed) VWAP algorithm to manage quantities at market yourself. If you're dealing with values that high your dealer will either have one or you can afford to get someone to write one for you!
    – MD-Tech
    Commented Jul 11, 2018 at 14:30

Directly from the dealer, generally large broker house or Banks.

OTC means they are not traded on stock exchange. Investopedia has a nice explanation.


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