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Choose a Broker Prior to making a decision to purchase OTC securities we strongly advise you to read our Risk Warning. and Investor Protection Information You must open an account with a brokerage firm (the entity that executes your buy and sell order) to buy Pink Sheets stocks. Investors cannot buy or sell securities directly through Pink OTC Markets. While your brokerage firm account will allow you to trade Pink Sheets stocks, as well as those listed on NASDAQ, the New York Stock Exchange, and other venues, investors should clearly understand that trading practices for OTC securities are different from those of securities traded on exchanges. Your broker or the market maker they route your order to, may not provide you with limit order display or instantaneous executions in Pink Sheets stocks. Unlike those listed on NASDAQ and New York Stock Exchange, OTC equity stocks are not required to meet listing standards. This means there is a wide range in the quality of issuers that are traded on OTCQX, OTCBB, Pink Sheets, and the grey market, from major international conglomerates to very small companies struggling to survive. Investors must be aware that good information is simply not available for many of these companies and that there are unscrupulous individuals that will attempt to defraud investors through manipulative schemes in OTC stocks. While Pink OTC Markets cooperates fully with securities regulators and those regulators are continually working to combat fraud, it is not possible to eradicate fraud from the markets. Accordingly, you must be very careful in making a decision to invest in a Pink Sheets stock or any OTC Security. Prior to making a decision to purchase OTC securities we strongly advise you to read our Risk Warning. and Investor Protection Information There are three types of brokers: a full service broker, a discount broker, and an on-line broker. Full-service brokers offer advice with reports from their firm's research department as well as execute transactions for you. Discount brokers charge less per transaction but offer less investment advice. Online brokers offer the least expensive way to trade your stocks; you use the internet for transactions and your own research. Before you choose a broker, ensure that the firm will accept orders in Pink Sheets stocks. Not all brokers do! Know the Difference Between a Limit Order vs. Market Order When placing an order with your broker, you will come across such terms as Market Order and Limit order. It is important that you understand each type of transaction. To avoid buying or selling a stock at a price higher or lower than you intend, place a "limit order" rather than a "market order." A limit order is an order to buy or sell a security at a specific price. When you place a market order, you can't control the price at which your order will be filled. Because the market price for your stock may go up or down considerably before your trade goes through, with a market order you may end up paying more for the stock than you intend, or selling at a price lower than you wish. For more detailed information, please read the SEC publication Trade Execution: What Every Investor Should Know. Always Research Your Proposed Investment You should not make a decision about investing your money in a particular company solely on the basis of a "hot tip" or someone's advice. It is important that you make an informed decision based on your thorough research of the company's annual report and current financial statements. To learn how to invest wisely and avoid fraud, visit the Investor Information Section of the SEC website.List of Online Brokers that Trade OTC Securities Below is a list of brokerages that trade Pink Sheets securities (please note, these are mostly discount and online brokerages): |
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