What is one main characteristic of the Over-the-Counter Market?

The Over-the-Counter (OTC) Market is primarily characterized by its decentralized nature, which means it operates without a centralized physical location. Instead of trading through a centralized exchange, transactions in the OTC market are conducted directly between parties, often facilitated by a network of dealers. This allows for greater flexibility in trading a variety of financial instruments, including stocks, bonds, derivatives, and foreign currencies.

In contrast to centralized exchanges, the absence of a physical trading floor means that transactions can occur at any time, and participants can interact through electronic networks. This decentralized environment caters primarily to smaller companies or less liquid securities, which may not meet the listing requirements of larger exchanges. Thus, the defining feature of the OTC market is its lack of a centralized exchange infrastructure, allowing for varied and less regulated trading practices.