Buying Over The Counter Stocks

Stocks found on the otc market are often penny stocks with prices as low as 0 05 to 0 10.

Buying over the counter stocks.

Cramer has spoke out against the stupidity of investors buying bankrupt stocks and i applaud. Most investors won t consider buying over the counter stocks because they think they are illiquid and thinly traded. Coupled with large spreads you can end up buying a stock at the 0 10 ask price and it can immediately. Over the counter otc securities are securities that are not listed on a major exchange in the united states and are instead traded via a broker dealer network usually because many are smaller companies and do not meet the requirements to be listed on a formal exchange.

Thus information about the company may be harder to obtain. Over the counter markets are where stocks that aren t listed on major exchanges such as the nyse or nasdaq can be traded. Otc stocks are more thinly traded so exercise caution when buying and selling these stocks. Instead of the 24 hour schedule required to trade stocks listed in different markets all over the world otc trading allows u s.

Over the counter otc stocks can easily be bought online. The process of purchasing or selling over the counter otc stocks can be different from trading stocks that are listed on the new york stock exchange or the nasdaq this is because otc stocks. Jcp stock now trades over the counter. The primary risks involved in trading over the counter otc stocks stem from lack of reliable information and the fact that otc stocks are commonly very thinly traded markets.

Otc stocks have less liquidity than their exchange traded peers low. It is necessary to realize that otc stocks represent smaller companies that are less often followed by brokers. Traders to trade foreign stocks during u s. A little thing called bankruptcy will do that to a stock.