What Are The NASDAQ And OTC?

There are different kinds of auctions that sell different kinds of things.

For example, some auctions sell expensive things like fine art.  Other auctions sell cheaper things, like Grandma Mable’s rocking chair (not saying anything against Grandma Mable here).  And some auctions sell technical things like computers, lets say.

We talked about the New York Stock Exchange (NYSE).  It’s a big auction that sells shares of stock in the big, expensive companies.  It’s kind of like the expensive, fine art auction.

You would never find Grandma Mable’s rocking chair at a fine art auction.  So there’s another exchange (auction) that sells smaller, cheaper companies.

It’s called the Over The Counter Market (OTC).  It’s more like the lower priced rocking chair / furniture auction.  Not knocking the companies that are sold here.  They are just much smaller companies, many of which are just getting started.  Some of these startup companies offer incredible profit opportunities if you have good research and pick the right one.

And then there’s an auction that sells shares of stock in technology companies — like Microsoft.  It’s kind of like our computer auction.  It’s called the NASDAQ, which stands for National Association of Securities Dealers Automated Quotations.  Say that fast three times.  Or do what everyone else does and just say Naz’ Dack.

Anyhow, that’s all you need to know.

Your stocks are bought and sold in different exchanges (auctions).  Which means you will buy and sell your stocks on different exchanges, depending on what type of stock it is.

If you are concerned about knowing which exchange to use, don’t worry; just read on.

You’ll like the answer in the next chapter.