Difference between Organized Exchange Market and OTC market
Constituents of Securities Market | Finance
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Management Notes
Difference between Organized Exchange Market and OTC market:
In Organized Exchange Market, there is a regulator through which transactions are completed.n OTC Market, there is a no regulator to carry out transactions.
Organized Exchange Market Vs OTC market
| S.No. | Organized Exchange Market | OTC (Over The Counter)Market |
| 1. | In Organized Exchange Market, there is a regulator through which transactions are completed. | In OTC Market, there is a no regulator to carry out transactions. |
| 2. | There is less chance of price manipulation in Organized Exchange Market. | There is more chance of price manipulation in OTC market because of many competing traders. |
| 3. | There is higher level of liquidity in Organized Exchange market because they have many participants and clients. | There is less liquidity in OTC market because fewer clients are willing to trade in OTC markets. |
| 4. | Organized exchange markets ensure transaction security. | OTC markets do not ensure transaction security as they are prone to fraud and dishonest traders. |
| 5. | Organized Exchange is a standard contract. | OTC contracts are customized contracts as there is no specified guarantors which increases the risk |
| 6. | Organized Exchange markets are centralized markets. | OTC markets are the decentralized markets. |
Similarly,
- Public Offering Vs Private Placement
- Traditional Financing Vs Microfinancing
- Microcredit Vs Microfinance
- Direct Finance Vs Indirect Finance
- Investment Vs Speculation
- CML VS SML
- Public Limited Company Vs Private Limited Company
- Warrant Vs Convertibles
- Open Ended Vs Close Ended Mutual Funds
- Nominal Vs Real Interest Rate
- ROA Vs ROE
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