In an OTC, also known as Over-the-counter trading, buyers and sellers quote prices and trade with each other without the supervision of an exchange. The two parties can negotiate the price before closing the trade, either through face-to-face or over phone calls, etc. This is the earliest method for trading.
When Bitcoin first came out, there was no exchange platforms for it. Investors mostly traded through OTC, only accepting cash-on-delivery. Now there are many standardized OTC platforms, Where buyers and sellers can directly pick who to trade with, which is as convenient as trading on an exchange. Through a reputable trading platform, you can mitigate counterparty risks such as the seller not transferring Bitcoins after receiving money.
Currently, LocalBitcoins and huobi.pro are the major OTC trading platforms.