More than 12,000 stocks trade Over the Counter
What are OTC Markets? also known as Over the counter (OTC). OTC Markets are a stock exchange where stocks that aren’t listed on major exchanges such as the New York Stock Exchange (NYSE) can be traded.
The companies that issue these stocks choose to trade this way for a variety of reasons. These companies are typically seeking public funding, Reg A’s, crowdfunding, and possible diluted share structures. While others will seek less expensive forms of going public through mergers, reverse mergers, buyouts and SPAC’s (Special Purpose Acquisition Company).
Historically, the phrase trading over the counter referred to securities changing hands between two parties without the involvement of a stock exchange. However, in the U.S., over-the-counter trading is now conducted on separate exchanges
Best Market (OTCQX) – Only 4% of all OTC stocks listed are traded on this exchange.
Venture Market (OTCQB) – Middle tier where all companies must report their financials and submit to some oversight.
Pink Sheets – have no reporting requirements and don’t have to register with the Securities and Exchange Commission (SEC).
Gray Market – A gray market is an unofficial market for securities, and it is where stocks that are unlisted
OTC Markets Group (previously known as Pink Sheets) is an American financial market providing price and liquidity information for over the counter (OTC) securities. The group has its headquarters in New York City. OTC-traded securities are organized into three markets to inform investors of opportunities and risks.
What are penny stocks? Penny stocks — also called microcap stocks — are high-risk shares of companies that have a low market capitalization and trade at a low price. Historically speaking, the term “penny stock” referred to stocks that traded for less than one dollar per share.
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