The over-the-counter (OTC) market includes the trading in all securities not listed on one of the registered exchanges. If any registered dealer is willing to make a market in a security, it can trade in the OTC market. The third market refers to trading of exchange-listed securities on the OTC. Both are quotes from Schweser. Are they not conflicting each other on whether the securities breing traded are ‘listed on the exchange’ or not? Whats your take on OTC & third market?
Why do you see a conflict here? The third market refers to trading exchange listed securities in an OTC way. For example, if you want to sell me you MSFT stock, there is no reason you can’t sell me you shares at a price you and I negotiate and you send me a signed stock certificate and I give you a check. No exchange, but an exchange-listed security changes hands.
Sorry, I may be wrong, but isn’t your example an example of the Fourth Market? - i.e. stocks being traded outside the OTC? You and I meeting up to exchange stock certificate for cash I believe is not an OTC transaction. Please correct me if I am wrong…