Why are stocks traded over$-$the$-$counter $($OTC$)$ rather than on physical location exchanges like the NYSE?

OTC stocks are not subject to any regulatory oversight, making them less regulated than exchange$-$traded stocks.

Stocks traded OTC are often less frequently traded and may be too small or new for traditional exchanges, leading dealers to maintain inventories to facilitate trades.

OTC stocks are generally more liquid and have higher trading volumes than those on exchanges.

OTC markets only deal with international securities$,$ while physical exchanges only trade domestic stocks.