Over The Counter Bulletin Board Stock (OTCBB Stock)
OTCBB stock are traded "over the counter" which refers to stocks not traded on the major exchanges such as the NYSE and the AMEX. Stocks traded over the counter are smaller companies that are unable to make the listing requirements of the major exchanges. They are also referred to as penny stocks, pink sheets and the grey sheets. On the OTCBB you can find companies trying to perform well enough to become listed on the major exchanges. You will aslo find companies that have a bad history and have been de-listed from the major exchanges and wind up trading over the counter. When trading any OTCBB stock you must be careful. Besides the obvious issues with companies not meeting listing requirements or being very small. There is a large amount of stock manipulation that occurs. Yearly there are many arrest for those who run "Pump and Dump" schemes.
Penny Stocks on Nasdaq
Nasdaq is a dealer network that operates as a stock exchange. While OTCBB stocks traded on the dealer networks, they do not trade on the Nasdaq. Penny stocks are considered OTCBB and trade over the counter some of these companies strive to become listed on exchanges such as Nasdaq. Penny stock are required to file with the SEC. You can buy penny stocks from your online broker, Etrade, TD ameritrade or scottrade to name a few. Each of these brokers have different criteria for buying OTCBB stocks. None of these brokers will allow you to buy penny stocks on margin.
Pink Sheets Stock
Pink sheets are also called Pink quote and are traded over the counter. Pink sheets are considered a tier lower than penny stocks. Although they are both traded on the OTCBB, penny stocks are required to file with the SEC while the pink sheets are not. Many pink sheet companies strive to become listed on the OTCBB as penny stocks. Some pink sheet companies file with the SEC even though they are not required to file.
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