OTC Bulletin Board
From Wikipedia, the free encyclopedia
The OTC Bulletin Board is a regulated quotation service in the United States, owned by the NASD, for stocks which are not listed on one of the major U.S. stock exchanges. It displays real-time quotes, last-sale prices and volume information in over-the-counter (OTC) equity securities that either do not meet the market capitalization, ownership, or other requirements of major stock exchanges, or for companies who do not choose to have their shares listed on such exchanges.
OTC markets are avoided by many investors due to a fear, sometimes well founded, that shares traded on them can have prices which are easily manipulated. At times, it is difficult to differentiate between OTC shares and penny stocks sold as part of what is essentially a confidence game. The OTC Bulletin Board is an attempt to differentiate the legitimate OTC market from such schemes and, as such, has its own capitalization requirements, which are nonetheless far less restrictive than those imposed by major exchanges. Many shares which have been "de-listed" from major exchanges for falling below minimum capitalization or other requirements nonetheless end up being traded on the OTC Bulletin Board.
With new rules in place, The OTC Bulletin board is home only to fully reporting companies, making the OTCBB a much safer place to trade compared to the way it used to be. Companies that do not qualify to be on the OTCBB usually trade on the pink sheets.
[edit] See also
- Pink Sheets
- PLUS Markets Group - the United Kingdom equivalent of the OTC Bulletin Board
