OTC Bulletin Board has the number one penny stock forum in the OTCBB trading and penny stock investing markets. Receive our penny stock and pink sheet picks in real-time. Place picks of your own on our OTC bulletin board where we can review the merits of your choice. Some of our penny stock traders are great at picking the next money maker.
The OTC bulletin board has many names, the OTC stands for over the counter, you will see the OTC bulletin board referred to as, OTCBB, penny stocks, pink sheets and the OTC market.
Who Buys OTC Stock
Over the counter stocks are low priced, they are defined as being under 5.00 but you can find many OTCBB stocks trading for 25.00 and more. These are usually thinly traded and not very popular. Most of the penny stock, pink sheet stocks and penny shares that reach cult status on the forums trade for under 5.00. These OTC bulletin board stocks are bought by investors looking to find the next Microsoft. Warren Buffet has been know to scour the penny stock and pink sheet markets looking for companies to invest in or take over.
There are many traders who invest in a few penny stocks and tout their virtues to other traders in hopes that all these traders will invest in the stock as well. With everyone buying the same stock it should rise in value. This is the theory of many investors and at times it works. The majority of shares traded on the OTC bulletin board are by “traders”. These “traders” buy and sell shares of OTC companies in the hopes of turning a profit. Some are pure day traders where they enter and exit the trade on the same day. At the end of the day there is nothing at risk and they do it again in the morning. Others are swing traders who decide on a stock at a price they feel the stock is worth, they set a stop limit in case they’re wrong which limits their losses. Then they let the stock sit and wait for it to make a move. Once the stock moves they sell for a profit.
Why Trade OTC Stocks
Money. Money. Money. Not unlike a casino, traders wade into the OTC bulletin board market even though they know its ripe with fraud. They are willing to risk a little bit of investment money for the possibility of a huge money maker. Penny stocks are priced very low, even as low as .0001 if their company receives good news or traders become interested in a stock it will move quickly, it is not unheard of for a penny stock to run 1,000’s of %. These types of run will happen and they’ll happen in a short time span, usually within a couple of days the run is over. In the penny stock world everyone loves a winner and a stock that begins to run quickly develops a following as more and more volume hits a stock with more buyers the price per share skyrockets. At times it drops just as quickly, leaving those who bought at the top of run with a worthless investment. After a strong run the traders usually stick around to play many of the strong bounces. I call them aftershocks and when timed right these can be gainers of 100’s of %.
Is There Fraud in the OTC Bulletin Board Market?
There is an enormous amount of fraud to contend with when playing penny stocks and pink sheet stocks. If you can believe it, not all fraud is bad. Some of the fraud involves “pumps” from the famous “pump and dump” schemes. If your an OTC trader your looking for volume in a stock that is moving up, these pumps provide that opportunity. You must be careful and exit quickly while taking profit. You don’t want to be stuck on the top side of the “pump” when the pumpers begin to dump.
Most traders who spend time in the OTC market can spot a “pump” and they know who the pumpers are. Then they can play the stock accordingly. A lot of stocks are pumped legally through promotions and profiles where a disclaimer announces why they are touting the stock. At other times the fraud is tougher to find and more dangerous. Routinely a company run by bad actors will dilute the share structure without filing on time, once the shares are out and virtually worthless they will reverse split creating a smaller amount of operating shares, change the companies name and then dilute again. During the dilution they will either put out fake press releases, higher stock pumper and profiles under false terms or higher out people to spam the OTC bulletin boards with their stock symbol
Definition of OTC Bulletin Board
The OTC bulletin board is an electronic quoting system for OTC stocks that are not listed on the Nasdaq or any other stock exchange. Nasdaq does control the OTC but it does oversee it. Stocks that trade on the OTC market such as penny stocks and pink sheets, can apply to meet the criteria of becoming a Nasdaq stock. When I company begins to file with the SEC for inclusion into the Nasdaq the stock can begin to rise quickly. Many OTC bulletin board traders are searching for low priced stock gems that will bring them riches. If a company is going to be successful it will eventually move up the trading ladder and begin trading on the Nasdaq.
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