Talk:Over-the-counter (finance)

Suggestions

This article mentions "bilateral contracts" twice, but implies that term means something very different than what it really means. Contracts are either "bilateral" or "unilateral" regardless of the number of parties. The article correctly indicates that a bilateral contract increases the liability associated with a contract, but the implication is that the increased liability comes from the contract being between only two parties. That isn't the case. Bilateral contracts with two parties require both parties to perform and that means either party can be in breach. Unilateral contracts with two parties require only one party to perform on the condition that something else happens (usually when the other party does something). In a unilateral contract with two parties, only one party can be in breach. Thus, a unilateral contract, conceptually, has less room for liability. Everything I've said so far is pretty straight forward and easily confirmed by looking up the terms in a law dictionary. How it applies in this context is what needs some work.

A unilateral contract for a security would look something like this: X promises to give 1 stock to Y if Y pays $10 to X before January 1, 2018.

Because Y never promises to do anything, Y can never be in breach of the contract, and X will only ever have an obligation if it has already received payment. This is a fairly low risk deal for both parties.

A bilateral contract for a security would look something like this: X promises to give 1 stock to Y and Y promises to pay $10 to X, both occurring before January 1, 2018.

Both X and Y have made promises, and neither is conditional. Each party is obligated to perform even if the other fails to perform. Of course, if a party fails to perform, the other party can sue for breach of contract. But, in this simple example, the breach would not relieve the non-breaching party's obligation to perform. This is what creates the elevated risk in a bilateral contract. If the distinction between the contract types is maintained in this article, the reason should be made clear. Bdhook (talk) 14:56, 27 March 2017 (UTC)

hi I feel like this article could use significant expansion. Most notably, the primary differences between OTC and Exchange-traded stocks: the common use of physical stock certificates as opposed to simple records, what kind of businesses are more likely to trade OTC, and regulators, etc. David G. (talk) 04:24, 17 December 2008 (UTC)

This article feels out of date. there is no mention of the world wide regulations that have come into effect over the last 5 - 8 years that now causae the majority of OTC deals to be public information. At least cross references to Dodd-Frank and EMIR. — Preceding unsigned comment added by 171.159.194.10 (talk) 18:51, 29 April 2016 (UTC)

Warnings?

is wikipedia really the appropriate place to put regulatory-body statements like "Investors should avoid the OTC market unless they can afford a complete loss of their investment" or "Investors who purchase securities based on a "hot tip" or the advice of chat room touts may often be disappointed"? the whole second paragraph of the "OTC-traded stocks" section reads like it was ripped right out of some SEC-mandated disclaimer. quite apart from the complete lack of sourcing, it doesn't seem very encyclopedic. —Preceding unsigned comment added by Adavies42 (talk • contribs) 01:33, 22 January 2009 (UTC)

Agreed - Wikipedia shouldn't even acknowledge that it has any responsibility to address these points, as it doesn't. Westmorlandia (talk) 13:24, 28 April 2009 (UTC)

That said, it would be appropriate to discuss the prevalence of OTC scams and manipulation in a neutral fashion-- given appropriate sources of course. I'm reasonably sure such sources would exist; seems like you're always hearing about something nasty involving OTC trading. —/Mendaliv/^2¢/_Δ's/ 05:05, 28 January 2010 (UTC)

Concerning Wal-Mart

The article currently states that Walmart was traded OTCBB at one time, but I cannot find any confirmation of this fact anywhere. The link provided is dead. — Preceding unsigned comment added by Astrohoundy (talk • contribs) 21:38, 13 January 2015 (UTC)

OTC-V & Crowdfunding & Free Speech

There seems to be very little here about or for the inventor and entrepreneur, and while the penny stock market is infinitesimal in volume; the tiny inroads like the NASDAQ's OTC-V may be worthy of a article. — Preceding unsigned comment added by 64.183.42.57 (talk) 21:37, 3 June 2017 (UTC)