Off Board

Fun fact: the New York Stock Exchange’s nickname is The Big Board. (It was also the nickname of the principal's favorite educational tool in the '50s, but we digress.) We guess it’s not bad, as far as nicknames go. We’ve definitely heard worse. Anyway, when trades aren’t conducted on major exchanges like the NYSE, they get a sweet little nickname of their own: “off board” transactions. Get it? Because they aren’t on the Big Board? Man, where do they come up with this stuff, right?

So why would trades happen this way? There are two reasons. The first would be if they are OTC transactions, because those don’t happen on major exchanges anyway. The second reason might be because an investor or institution wants to trade a large amount of a listed stock without impacting general consumer confidence in said stock.

For example, let’s say Banks N Stuff, Inc., a big financial institution, wants to sell 25,000 shares of a certain stock to Fun Funds, an investment firm. A big sell-off like that can have a big impact on investor confidence in the stock, so companies sometimes opt not to conduct big trades like that on a large exchange. They’d rather do it off board, so they don’t unnecessarily or unintentionally impact the value of the stock.