In the National Association of Securities Dealers' Automated Quotation System (NASDAQ), which is run by the National Association of Securities Dealers (NASD), trading in OTC stocks is done via on-line computer listings of bid, which asks prices and completes transactions.
Like the exchanges, NASDAQ has listing standards that must be met for securities to be traded in that market. Similar to an exchange it provides a "meeting place" for buyers and sellers.
The typical investor generally will not know whether their security is bought or sold through and exchange or over the counter. The investor engages a broker who arranges the transaction in the appropriate market at the desired price.