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
- Now quotes can be viewed online at FINRA's OTC Bulletin Board (OTCBB)
- 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