OTC Trading Market - A Detailed Guide for Investors

In addition to official stock exchanges like HOSE, HNX, or Upcom, the OTC market is gradually becoming the preferred choice for many investors. But what is OTC? How to trade OTC effectively? This article will help you better understand this decentralized market.

What Is OTC? An A to Z Concept

OTC stands for “Over-the-counter” (, representing a decentralized market operating outside traditional stock exchanges. Unlike trading on large exchanges, OTC allows investors and brokers to negotiate directly on prices through bilateral agreements.

In Vietnam, the OTC market is also called by various names such as network market, free stock market, or electronic quotation market. OTC transactions are not limited to a fixed location—they can occur at bank counters, securities companies, or online via phone, email, or digital platforms.

The operating mechanism of the OTC trading market relies on a network of brokers, investors, information systems, and specialized forums. Instead of through a centralized exchange, participants agree on prices and trading conditions for different types of assets.

Differences Between OTC and Traditional Stock Exchanges

To better understand the distinctions, see the comparison table below:

Advantages of OTC Trading

Expanding Investment Opportunities

The OTC trading market offers investors a wider range of assets compared to centralized exchanges. Besides stocks, you can access derivatives, CFDs, options, and many other products to optimize your portfolio.

Strong Development of Derivative Products

Derivative products in the OTC market play a significant supporting role for spot trading. Taking Bitcoin as an example, since 2017, the trading volume of Bitcoin derivatives has accounted for over 30% of the total market value. In June 2021, Bitcoin derivatives volume even surpassed spot trading, demonstrating the increasing popularity of these products.

Reliable Safety and Security

Modern OTC markets have been optimized, automated, and layered with security similar to centralized exchanges. Many OTC brokers are regulated by reputable financial authorities, so investors can participate with confidence.

Higher Leverage Usage

On traditional stock exchanges, investors are typically granted a maximum leverage of 2x, and no leverage is available for unlisted stocks. In the OTC trading market, you can use much higher leverage to amplify profits.

The OTC Market in Vietnam: Big Opportunities Not Yet Fully Exploited

According to Vietnam’s General Statistics Office, by the end of 2020, the country had about 683,600 active enterprises. However, only 1,575 companies were listed on the three major exchanges (HOSE, HNX, Upcom), accounting for less than 0.2%.

With such a low number of listed companies, the OTC trading market becomes a “gateway” for businesses seeking capital without meeting the strict requirements of centralized exchanges.

In recent years, the domestic OTC market has cooled down but remains an attractive investment channel with high returns. The market is becoming increasingly popular as it expands operations on websites and mobile apps, organized professionally like major exchanges.

Vietnam’s major OTC trading platforms such as SanOTC, VN-Direct, Vietstock provide diverse information and stable operation. However, these platforms mainly focus on domestic OTC stocks and have limited international products.

Risks to Watch Out for When Trading OTC

Avoid Low-Volume Securities

Stocks with very low trading volume pose high liquidity risks. When you need to sell, it’s difficult to find a counterparty, leading to stuck capital and difficulty recovering your investment.

Diversify Your Investment Portfolio

Do not put all your capital into a single asset. Allocate funds across different products to reduce systemic risk. Regardless of the market, over-concentration in one product can cause significant losses.

Use Leverage Wisely

Although OTC offers attractive yields, price volatility can be intense. Leverage can help you increase profits quickly but also risks “blowing up” your account. Use leverage according to your analysis skills and experience, avoiding overuse without proper understanding of the products.

The OTC trading market holds enormous potential for investors seeking high-profit opportunities, but it requires careful preparation, proper risk management, and deep knowledge of financial products.