Organized and over-the-counter securities

Organized and over-the-counter securities exchanges are similar in that they both deal with the trading of securities such as stocks and bonds. However, they are different in many ways. An organized securities exchange is defined as “A securities marketplace where purchasers and sellers regularly gather to trade securities according to the formal rules adopted by the exchange.”(www.trading-glossary.com) On the other hand, a security is traded over-the-counter (OTC) if it trades in some context other than a organized exchange. The New York Stock Exchange and the Nasdaq stock market are two examples of organized securities exchanges.
In an organized market, trading is done in various ways: it may occur on a continuous auction basis, it may involve brokers buying from and selling to dealers in certain types of stock, or it may be conducted through specialists in a particular stock. Some stock exchanges, such as the New York Stock exchange (NYSE), sell seats (the right to trade) to...