Over-the-counter vs exchange

Finally, markets differ by where and how a trade is arranged — on a centralized exchange, or directly between two parties over the counter.

Exchange-traded (bolsa)

On an exchange, trades pass through a centralized, regulated venue with a public order book — B3 in Brazil, the NYSE or Nasdaq abroad.

• Standardized contracts and listing rules.
• Transparent, public prices visible to everyone.
• A clearing house guarantees settlement, so you do not need to trust your counterparty directly.
• Highly liquid for popular instruments.

Over-the-counter (balcão)

In the over-the-counter (OTC) market — balcão in Portuguese — two parties deal directly, off any central exchange. Many bonds, currency forwards, swaps and customized contracts trade this way.

• Customizable — terms can be tailored to exactly what the parties need.
• Less transparent — prices are negotiated privately, not posted publicly.
• Counterparty risk — without a clearing house, each side relies more on the other actually delivering (organized OTC venues and central registries reduce, but do not always remove, this risk).

In Brazil, the balcão organizado (organized OTC) sits under regulated infrastructure that registers trades — one reason the country's exchange group is literally named Bolsa, Balcão.

Choosing between them

• Exchange suits standardized, liquid instruments where transparency and settlement guarantees matter most.
• OTC suits large, customized or specialized deals between sophisticated parties.

Understanding these three pairings — primary/secondary, spot/futures, exchange/OTC — gives you a map for placing any instrument or trade you encounter, and rounds out your foundation in how financial markets work.