Dealer's work in the OTC market

Question

What does a dealer do in the OTC market? Financial trades are made in an over the counter market. Explain.

Answer 1

In contrast to the organized exchanges, there are physical locations. These physical locations better termed as over the counter market has no permanent location and place, or more correctly, it is everywhere. The OTC is a network of dealers all around the world who maintain inventories of securities for sale. If you wanted to buy a security that is traded OTC, you would call your broker, who would then shop among competing dealers who have the security in their inventory. After locating the dealer with the best price, your broker would buy the security on your behalf.
The role of dealers:  Dealers make their living buying securities and reselling them to others.  They work just like car dealers who buy cars from manufacturers for selling to others. They make money by buying securities for one price (called the bid price) and selling them for a higher price, (called the ask price). The difference, or spread, between the bid price and the ask price represents the dealer’s fee.