Difference between Organized Exchange Market and OTC market | Finance

Difference between Organized Exchange Market and OTC market
Constituents of Securities Market | Finance
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Management Notes

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.

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