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The Ultimate Guide to OTC Reference Data 2021
What is OTC Reference Data?
Over-the-counter (OTC) reference data refers to information about securities that are traded for companies which aren’t listed on a formal exchange like the NASDAQ or New York Stock Exchange (NYSE). Securities which are traded over-the-counter are traded via a broker-dealer network instead of a centralized stock exchange. These securities are not listed on a standard market exchange because they don’t meet the requirements to have a listing. OTC reference data provides a detailed insight into these OTC securities and the OTC market.
How is OTC Reference Data collected?
Because OTC reference data refers to securities which are traded for unlisted companies it is harder to find information for them than it would be for companies listed on the major stock exchanges. The OTC reference data is often collected by companies which specialize in OTC markets and so are well-poised to analyze the market and compile this information into a comprehensive reference report.
The data that is collected can be split into different categories:
Some data (first-party) comes from the brokers and buyers themselves. This can come from the OTCBB (Over-The-Counter Bulletin Board) or Pink Sheets listings and all this information comes from the parties directly evolved in the trade.
Public records of OTC trades are a second-party source of OTC data. Despite the trades not taking place on central exchanges, a record has to be kept of the transaction and this data can be used by companies in compiling an OTC reference dataset.
OTC reference data can also be found through third-party sources, such as press releases or news articles. While it often requires more effort to get OTC information from these sources, they can be useful.
What are the attributes of OTC Reference Data?
Typically, OTC reference data can be split into different sections:
Securities data - details about the securities that have been traded on the OTC market on a specific day. This could include Pink Market (where there are no financial standards or disclosure requirements) or Grey Market deals (when a stock that has been suspended from trades off the market are bought or sold before official trading begins). This dataset will also tell you about bid offers that were made and the asking pricing attached to these unlisted securities.
End of Day pricing - information about the closing best bid and the offer price/size data for all the OTC securities on the market that day. This might also tell you about outstanding shares or the last sale of the day that was made among other different key reference data points.
Company data - company information for all companies that were involved in that days’ OTC trades, such as the name, business description and directors.
What is OTC Reference Data used for?
Financial market investors use OTC reference data to make well-informed investments and trades which are backed by tangible data and information. Because OTC trading doesn’t work on the centralized exchanges, it is normally seen as a much higher risk investment. For this reason, investors tend to use OTC reference data to track the historical performance of different securities and to make sure their investments are as well-informed as possible to minimize risk exposure. If they have access to real-time OTC reference data feeds, they can have a better chance of deciding when it’s the best time to buy or sell their assets and securities.
How can a user assess the quality of OTC Reference Data?
Due to the high risk nature of OTC trading, financial investors rely heavily on OTC reference data. For this reason, it is important for OTC reference datasets to provide real-time details about OTC trades. This means you’re getting the most-up-to date intelligence about the market. Historical OTC reference datasets can also be useful as they can be used to track market developments, but even in these cases it is crucial that the information is kept updated by the data provider.
Before buying any OTC reference data, always check the data provider’s reviews. Lastly, ask for a data sample before you buy from a provider to ensure that their OTC reference data is of the quality your business needs.
Who are the best OTC Reference Data providers?
Finding the right OTC Reference Data provider for you really depends on your unique use case and data requirements, including budget and geographical coverage. Popular OTC Reference Data providers that you might want to buy OTC Reference Data from are Exchange Data International, IHS Markit, Refinitiv, and OTC Markets.
Where can I buy OTC Reference Data?
Data providers and vendors listed on Datarade sell OTC Reference Data products and samples. Popular OTC Reference Data products and datasets available on our platform are EDI Outsourcing Service to keep your security reference database updated by Exchange Data International, EDI Global Market Holidays and Timings Calendar (2066 exchanges, 152 countries) by Exchange Data International, and EDI Corporate Actions Data US + Canada (daily updated) by Exchange Data International.
How can I get OTC Reference Data?
You can get OTC Reference Data via a range of delivery methods - the right one for you depends on your use case. For example, historical OTC Reference 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 Reference Data APIs, feeds and streams to download the most up-to-date intelligence.