Over-the-counter (
OTC) or
off-exchange trading is done directly between two parties, without any supervision of an
exchange. It is contrasted with
exchange trading, which occurs via
exchanges. A stock exchange has the benefit of facilitating
liquidity, mitigates all
credit risk concerning the
default of one party in the transaction, provides
transparency, and maintains the current
market price. In an OTC trade, the price is not necessarily published for the public.