OTC Market and Pink Sheets

Penny Stocks are traded over the counter (OTC) through quotation services such as the OTC Bulletin Board or the Pink Sheets. OTC or known as OTCBB (Over The Counter Market Bulletin Board), is a regulated quotation service that displays real time quotes in over the counter equity securities. An OTC security is any stock that does not trade on national securities exchange. Broker-dealers who subscribe to the system can use the OTCBB to look up prices or enter quotes for OTC securities.

OTCBB was made to make the OTC equity markets more transparent, to spread price quotes and trade transactions. The system enables anyone form the largest firm to the smallest investor to know about the data of trades.

Pink Quote, informally known as the Pink Sheets, is an electronic quotation system that displays quotes from broker-dealers for many over-the-counter securities. Market makers and other brokers can use Pink Quote to publish their bid and ask quotation prices. These quotes were printed on pink colored paper so it is called Pink Sheets.

To be quoted in the Pink Sheets, companies do not need to fulfill any requirements (e.g. filing financial statements with the SEC, or issue a annual report). Many of these companies in Pink Sheets do not file periodic reports or audited financial statements with the SEC, making it very difficult for investors to find reliable, unbiased information about those companies. This means that you can find exciting opportunities if you can do proper research.

Makers who set markets in pink sheet stocks have very large spread. It is very common for a stock in the pink sheets to have a bid of .1 and an ask of .2. Most pink sheet stocks have went down so far in price that they often trade at less than their book value. If one they they issue a report that attract a lot of attention because it is undervalued, you can get lots of profit.

What is the easiest way to trade penny stocks:

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