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Over The Counter Stocks

Over The Counter Stocks

Nick Name
Penny Stocks
Abbreviation
OTC

Over the Counter (OTC) stocks are stocks that trade through dealer networks instead of on a traditional exchanged.

  • OTC stocks don't have to publish balance sheets and other financial reports like stocks traded on exchanges do
  • Originally prices were published only in the Pink Sheets by the National Quotation Bureau
  • Debt securities and other financial instruments such as derivatives are also traded over the counter
  • Typically trader for less than $5 per share
  • Sometimes considered to the "Wild West" of stocks
    • Might be safer today given FINRAs oversight

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