Financial securities are traded in one of two ways: either on an exchange, such as the New York Stock Exchange or NASDAQ, or “over the counter (OTC)”Exchanges are centralized and regulated markets where securities are traded in a safe, standardized, fast and publicly transparent manner. Larger established companies usually choose exchanges to list and trade their securities. But many companies do not meet the listing requirements for an exchange, or do not want to pay the cost. These companies can have their securities traded “over the counter.” Over the counter trading happens through decentralized dealer networks. Broker-dealers negotiate directly with each other over computer networks and by phone. This allows smaller company stocks and non-standard quantities to be traded. This also means less public transparency, since prices are not disclosed publicly until after the trade is complete. Stocks which trade on an exchange are called listed stocks. Stocks not on an exchange that are traded over the counter are called un-listed stocks, however there are some stocks that trade on both an exchange and OTC. OTC trades tend to be for smaller company stocks and debt securities. Debt securities such as bonds are generally traded by investment banks making markets for specific issues. To save the cost of paying the exchange fees, brokerages often match buys and sells from clients internally, or with another brokerage. This is usually referred as internalizing. While OTC transactions often seem more risky and less liquid, they help companies and institutions promote equity or financial instruments that wouldn't meet the requirements of regulated, well established exchanges.