In general, it is an unofficial, unregulated capital market or a similar marketplace which is not subject to a specific regulatory or supervisory intervention by the state-level authority. A grey market, also called a parallel market, is where securities are traded unofficially or away from the oversight of an official regulatory body. Grey market securities are traded over-the-counter (OTC), i.e., not on or through a stock exchange/ venue, but only by brokers and and other trading providers.

In this market, the investors may also trade securities before trading is officially launch in an organized exchange. Trading in grey market is carried out in person (without involvement of an intermediary) and by direct means of payments (cash). For example, equity shares, tax saving schemes, investments in real estate are all available on the grey market (gray market).

In another more specific context, grey market represents the transactions carried out before an initial public offering (IPO) listing and over the period from the IPO start date to the allotment date (typically known as an IPO grey market). IPO grey market is the over-the-counter market (OTC market) where deals are executed only among a select or trusted group of investors, rather than the public.