Interdealer Quotation System

First, a bit of background on the structure of the U.S. equity markets.

Big, blue-chip stocks trade on the NYSE or the NASDAQ. Those represent the key big-time equity exchanges.

But there's another exchange system, known as the Over-the-Counter Bulletin Board, or OTCBB.

Imagine a shopping mall. The NYSE and the NASDAQ represent the big stores: Macy's, the Apple Store, the Build-a-Bear Workshop, etc. The OTCBB represents the slightly sketchy pagodas set up in the mall walkways...the small booths selling cell phone accessories and sunglasses and cut-rate perfume.

The over-the-counter market, also known as the pink sheets, includes a lot of stocks that couldn't meet listing requirements for the bigger exchanges.

Okay, with that in mind, the interdealer quotation system is an electronic trading system that connects the OTCBB, as well as the NASDAQ and the NASDAQ small-cap market. Members use it to trade stocks on these exchanges.