The NYSE, Nasdaq and NYSE American carry listed stocks with real listing standards. OTC Markets is a quotation system, not an exchange — and that distinction matters enormously for penny stocks.
Three venues carry the overwhelming majority of US listed trading, and one more quotes everything else. The difference between the two categories matters more than any other distinction on this page.
The New York Stock Exchange is the oldest and largest by listed market value. It is home to most of the long-established industrial, financial and consumer names. It retains a human element in its market structure — designated market makers with obligations at the open and close — though the bulk of matching is electronic like everywhere else.
Nasdaq was the first fully electronic market and remains the primary home of technology and biotech listings. It operates a dealer model: multiple market makers compete to post the best bid and offer, which is what you are looking at on a Level II screen.
Formerly the American Stock Exchange and then NYSE MKT, NYSE American is the small-cap venue of the NYSE group. Its listing standards are genuinely lower than the main board, which makes it where a lot of legitimate sub-$5 companies actually trade — an important middle ground between a major listing and the OTC market.
This is the distinction worth internalising. OTC Markets Group runs a quotation system, not an exchange. Securities there are not listed; they are quoted. There is no exchange imposing minimum price, minimum shareholder count, governance requirements or a duty to keep filing.
OTC Markets splits its universe into tiers — OTCQX, OTCQB and Pink — by how much current information the company provides, with Pink ranging from current filers down to companies publishing nothing whatsoever. A great many penny stocks live here. Our OTC versus Nasdaq page covers what changes in practice, and it is a larger list than most new traders expect.
Trading guides on StockMarketWatch — the same material for large caps, with live data attached.