The Ultimate Guide to OTC Data 2021
What is OTC Data?
OTC data is information relating to securities traded on the OTC market. OTC, or ‘over-the-counter’, trading doesn’t take place on formal, centralized stock exchanges, but is conducted between brokers and buyers via the Over-the-Counter Bulletin Board (OTCBB) or Pink Sheets listings. Stocks traded using OTC are referred to as ‘unlisted’. OTC data provides users with financial market intelligence specifcally for this branch of trading, where reliable data is essential for yielding high returns.
How is OTC Data collected?
OTC data is collected from either first, second or third-party sources. These are:
First-party - First-party OTC data comes from brokers and buyers themselves. Information about a security and trade deal can be collected from announcements and reports on the OTCBB and Pink Sheets listings which come directly from the parties involved in the OTC trade.
Second-party - Public records count as second-party sources of OTC data. Although OTC trading takes place outside of central exchanges, the National Association of Securities Dealers still keeps public records regarding OTC transactions to regulate the trading of OTC assets.
Third-party - OTC data third-party sources include news companies and research firms. News and updates about the OTC market can be scraped to compile OTC data feeds and datasets.
What are the attributes of OTC Data?
Bid offer - the bid a buyer submitted for an unlisted security.
Ask price - the price attached to an unlisted security.
End of day pricing - the price assigned to an unlisted stock at the end of an OTC trading window.
Security data - raw information about the unlisted stock.
Company data - firmographic information about the company listing the security on the OTC exchange.
What is OTC Data used for?
Because OTC trading isn’t part of the centralized exchanges, it’s a considered higher risk investment strategy. Investors and traders don’t always have access to information about the companies listing securities as they would if they were trading listed stocks. This lack of information means there’s a risk that traders could invest in a stock which won’t perform well. To counter this, OTC traders buy OTC data so that the can make well-informed, data-driven decisions. OTC data is a huge part of risk management for investors, because of the speculative nature of trading OTC shares. Real-time OTC data feeds can show investors when it’s time to buy or sell their assets in line with market sentiment.
How can a user assess the quality of OTC Data?
OTC must be timely for it to be useful for OTC investing. Look for OTC data feeds and APIs which are updated in real-time, because this way, you can be sure you’re getting the most up-to-date stock market intelligence. When buying a historical OTC dataset, data providers should still make sure that they update the data it contains in response to OTC trading developments. This helps investors conduct accurate OTC data analytics and identify patterns to do with trading unlisted shares.
Who are the best OTC Data providers?
Finding the right OTC Data provider for you really depends on your unique use case and data requirements, including budget and geographical coverage. Popular OTC Data providers that you might want to buy OTC Data from are Exchange Data International, IHS Markit, FinPricing, DTCC, and Quandl.
Where can I buy OTC Data?
Data providers and vendors listed on Datarade sell OTC Data products and samples. Popular OTC Data products and datasets available on our platform are EDI Swap Curves OTC-Data Global - for valuations, portfolio analytics and risk management by Exchange Data International, EDI Outsourcing Service to keep your security reference database updated by Exchange Data International, and FinPricing FX Forward Points (Spreads) Data - Forex Data (Global) by FinPricing.
How can I get OTC Data?
You can get OTC Data via a range of delivery methods - the right one for you depends on your use case. For example, historical OTC Data is usually available to download in bulk and delivered using an S3 bucket. On the other hand, if your use case is time-critical, you can buy real-time OTC Data APIs, feeds and streams to download the most up-to-date intelligence.