To get straight to point, penny stocks, pink sheet stocks are not traded on Wall Street. This is something many people don’t like to hear because they assume that penny stocks are frauds since they are not in Wall Street.
There are so many fraudulent penny stocks, which is true; there’s not argument about that. Nonetheless, that does not mean every single penny stock is a fraud. If all of them were fraudulent there would not be any successful penny stocks traders around.
The millionaires in this market should be served as proof that we can trust the penny stocks market. If you have been following this blog you may have already read about some successful penny stocks traders. There are still more of those successful traders in the making.
The Wall Street stocks are traded on the New York Stock Exchange. Those stocks are also called the blue chips as a way to show their supremacy to their counterpart, the penny stocks. Since they are very secured as compared to penny stocks, traders often prefer to trade them.
Two things about them that may make people want to trade the pennies instead is because they require a large amount of money and they take longer to accrued profits. Those who want to invest their money for a long term can do so with the Wall Street stocks, but if you want your money quick the penny stocks are your best bet. However, losing is way easier with the penny stocks than the blue chips.
OTCBB and Pink Sheet (Not The Wall Street)
Contrary to blue chip stocks that are found in the Wall Street, penny stocks are traded on either OTCBB or The Pink Sheet. OTCBB means Over-the-Counter Bulletin Board, while Pink Sheet means exactly what the name applies.
A long time ago penny stocks were being traded on actual pink sheet (The were printed on them), this name is kept today although they no longer use this method. It is not difficult to spot the penny stocks that are traded on Pink Sheet because their names are longer due to the “PK” at the end of the symbols. This PK actually distinguishes them from the other penny stocks.
Different between Wall Street and OTCBB or Pink Sheet
According to the NYSE, the Wall Street or New York Stock Exchange was founded in 1792, many many years ago as you can see. It is one of the most liquid trading equities in the entire world. It has 90% more liquidity than the next largest exchange. It also has more displayed shares that are traded at the best price comparing to the next largest exchange.
On the other hand, the OTCBB and Pink Sheet do not reside in the Wall Street. Therefore, they are not represented by the Wall Street. Does that means they are scams? It does not have anything to do with those stocks trustworthiness; in fact, there are some companies that do not offer penny stocks but being traded as penny stocks. The downside is that they are not being well regulated as those traded in Wall Street.
Most of the Pink Sheet’s stocks are traded in this market because they are listed on a foreign market. This is the reason why many companies are traded in this market as Pink Sheets. Although they are legal you need to pay attention to the ones you’re choosing to trade. You do not want to have a bad experience with a company that is being managed by some con artists.
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