Over The Counter Penny Investing

My name is Michelle Cesare, and I taught myself how to invest in the stock market and still learning.

You are here to learn more about stock market investing, and understanding the basics before leaping into the unknown is wise.

In 2019, I knew nothing about investing in the stock market and dove right into learning the hard way, and the experience led me to understand more to make better decisions, and it is working for me.

When I started to invest in the stock market, I invested in penny stocks and dabbled. Dabbling gave me experience and confidence. I lost some money, but I also earned some money. I never broke the bank, and I gained more than I lost. Taking baby steps helped me understand the basics of stock market investing.

For people with no financial education investing in the stock market can be intimidating because investing is similar to gambling. However, if a person takes the time to delve into company forwarding thinking and feels the company has a bright future, buying shares for pennies can set you up for future capital gains. Imagine owning thousands of shares in a succeeding evolving company that you purchased the shares for pennies and sold the shares for dollars. For some, the capital gain can create financial stability and give the investor money to reinvest in other growing companies.

I’m a hobbyist who enjoys writing content online to earn passive income. I figured writing about OTC (over-the-counter) penny stocks would help people interested to learn about investing in the stock market would be helpful information to share. The more you understand before laying out money to invest, the better the chance of you gaining a profit.

If considering investing in penny stocks, there is information to understand and if you don’t understand the information from reading it once, read the content until it sinks in. I wish I knew the basics of penny stock investing before I invested. However, the knowledge I acquired needed to be had.

There are three tiers in penny stock investing. OTCQX, OTCBX, and Pink. First, there is the Current information, limited information, and no information.

The OTCQX market (The Intelligent Market) is a top-tier marketplace. Companies in this tier exhibit high-quality financial standards and have their information readily available.
The OTCQX market has the strictest regulatory and reporting requirements of the three OTC market tiers. Companies must report to the SEC, disclose material news to investors, and be sponsored by a third-party such as a bank or investment firm. The OTCQX market must meet revenue, stock price, and market cap minimums.

The OTCQB market (The Venture Market) is the middle-tier marketplace. Companies in this tier do not hold specific financial standards, but they are current in their financial reporting.
The OTCBX is a step down from OTCQX because it is not mandatory to disclose material news to investors but must be audited annually, reported to the SEC (Security and Exchange Commission) or banking regulator, and have a minimum share price of $0.01. These companies must also have a float of at least 10% of outstanding shares.

The OTCPink market is the bottom-tier marketplace. OTC Pink market, also known as over-the-counter Pink Sheets, is the least regulated OTC market. These companies must report to the SEC, but they do not have to get audited. An OTC Pink Sheet must also file a form with FINRA (Financial Industry Regulatory Authority) to get listed.

Companies on the OTC Pink marketplace are often penny stocks, shell companies, and companies that are in financial distress. Invest cautiously.

I hope you learned something valuable after reading the content above. I want my audience to know that I use Fidelity to buy penny stocks. I feel more secure using a reputable brokerage instead of a decentralized market brokerage. It is a personal preference.

Want to learn more about investing? I use Investopedia.com to learn more about investing. Check it out.

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