Just would like to say I started with $1000 in my E-TRADE account & I'm over $4000 just a few months later and would have more if I would have just listened to your advice more. I'd like to say "Thanks and keep up the good work!"
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OTC vs. OTC-BB Confusion and Penny Stocks
January 24th, 2007
I should probably clarify the "OTC" issue once and for all.
In my book, Understanding Penny Stocks, I warn people against buying over the counter (OTC) penny stocks.
At the same time, I mention that over the counter bulletin board (OTC-BB) penny stocks are OK to invest in.
In fact, I frequently select OTC-BB penny stocks for my Penny Stock Insider newsletter. I never select OTC stocks. Confused yet? I don't blame you.
Here's the deal - there is a big difference between OTC and OTC-BB.
OTC means buying shares of penny stocks over the phone, or in person, without involvement of any stock market. Think of holding shares in a long defunct company, then approaching you neighbor and talking him into paying $50 for them. Usually OTC stocks are not listed on any exchange, and your chance of getting any investment out is near zero.
OTC-BB, on the other hand, is actually an extension of the Nasdaq stock market. It is a regulated exchange with reporting requirements. While the listing requirements are much lower than for the Nasdaq Capital Market, there is still a good sense of authority, liquidity, and enforcement. OTC-BB stocks can be appropriate for penny stock traders.
In my opinion, OTC stocks are horrible investments for traders of penny stocks.
I hope this blog didn't get too confusing. It's not my fault, it's the fault of the OTC and OTC-BB. Reminds me of the two teams in the Canadian Football League (CFL), the Roughriders and the Rough Riders. This is even more annoying considering that the CFL only has about 8 teams. Surely they could have named one something more original, like the "Marauders" or "Panthers" or whatever.