| If you are fairly new to the great world of stock | | | | OTCBB does not require any minimum share price |
| markets such as those traded on Wall Street, and | | | | or market capitalization. In fact unlike stocks in |
| hope to build your own financial empire much like | | | | large national stock exchanges the OTC micro |
| Warren Buffet did, then may I suggest that you | | | | stocks do not require to file any details of |
| try your fishing skills in penny stocks that are | | | | corporate governance or other requirements at |
| traded on the OTC. Now, you might wonder what | | | | all. There are those scam masters who take |
| is this OTC all about. | | | | advantage of this small SEC guideline by hyping |
| OTC Penny Stocks and OTCBB | | | | their penny stocks as those belonging to a |
| Well OTC stands for Over The Counter, and | | | | company listed in the NASDAQ which is in reality |
| OTCBB (Over the Counter Bulletin Board) is a | | | | false and misleading. |
| sort of stock exchange much like the national | | | | No Risk No Gain |
| stock exchanges that you might be familiar with | | | | Hence OTC penny stocks are a great risk to |
| such as the NYSE and NASDAQ. But I must | | | | trade since these are mostly speculative and |
| caution you that OTC stocks are not same in | | | | capped below $500 millions. For this you will have |
| character as those listed on the big national stock | | | | to consult authentic sources such as newsletters |
| exchanges. This is because OTC deals with only | | | | from reliable sources and also automated |
| micro stocks (the stocks that are mostly priced | | | | software that can help you to sort out the |
| under $1.00) that are popularly referred to as the | | | | potentially hot penny stocks from those that lack |
| penny stocks and sometimes as nano stocks too. | | | | momentum. You can guess the demand for a |
| As per the strict Securities and Exchange | | | | particular penny stock in comparison to others |
| Commission or SEC guidelines no penny stocks | | | | from the market by looking at the transaction |
| can be traded above $5. Any stocks that sell | | | | volume as well as the trading patterns that |
| more than $5 will have to be notified to the SEC | | | | overlap those of similarly successful stocks in the |
| by filing financial and other details about the | | | | past. Based on ones experience in dealing with |
| company to who the stock belongs. | | | | such stocks one can decide on the entry and exit |
| In fact those shares that failed to maintain the | | | | points to trade safely for better returns. |
| strict stipulations mandatory for companies listed | | | | However once you learn to fish in troubled |
| on the national stock exchanges such as when | | | | waters nothing could be as delightful to feast on a |
| shares of listed companies trade below $5 | | | | lovely catch from such turbulent waters. Similarly |
| because of poor performance or fail to file | | | | too is the case with OTC micro stocks. Nothing |
| financial details, such companies are immediately | | | | could be as lucrative and one can build ones |
| delisted and bundled out from the National stock | | | | fortune with very little funds by investing and |
| exchanges. These companies then have very little | | | | trading on the OTC market for penny stocks. |
| scope other than to list themselves with the | | | | You won't be surprised when you find that quite a |
| OTCBB. | | | | few amongst these penny stock companies will |
| That is why OTC penny stocks are a risk since | | | | one day grow into a giant sequoia tree, |
| one does not know the financial and business | | | | metaphorically speaking. In fact if you scan |
| details of the company including its past history. | | | | through the list of Fortune 500 companies, many |
| This is because one really does not know if the | | | | of them started business as penny stock |
| shares belong to a failed company that was once | | | | companies that have grown to become a giants |
| listed on the national stock exchanges or that of | | | | like Wal Mart and Dell. One never knows which of |
| a potential start up company. To get the details | | | | these companies will reach the zenith, but since |
| you will have to carry on with your own research | | | | you won't be investing from a long term |
| although micro-stocks in OTC have to send details | | | | perspective, I think you limit yourself in trading as |
| of their trading transactions (such as price quotes, | | | | per the market trends and not wait till it turns |
| details of sale prices and volume information ) to | | | | into some kind of a giant. It would be too risky |
| the NASDAQ as per SEC guidelines. | | | | from investment point of view. |
| Moreover OTC penny stocks listed on the | | | | |