Over the counter is also referred to as off exchange trading and this where financial instruments such as bonds, stocks, derivatives or commodities are traded directly between two parties. This is the opposite of exchange trading which is conducted through constructed facilities for the purpose of trading and this will include stock exchanges and future exchanges. Most non-standard products are traded in the OTC derivatives markets as they have less standard structures and are traded between two parties. In this scenario both the parties will have concerns on their credit risks with respect to the other party. OTC derivatives are mostly significant in asset classes including foreign exchange, interest rate, commodities and equities.
Over the Counter Bulletin board Stocks denoted as OCTBB is one form of acquiring penny stocks in Canada. The other form of acquiring these penny stocks is by using pink sheet. OCTBB is supposed to be registered with SEC while pink sheet does not require any registration. The Canadian OCTBB is not available for trading for everyone. It is important to do thorough investigations when reading fillings of any Canadian Stocks and this is because some people are misled to buy cheap stocks and once they have the prices fall and this will result in loss of investment. OTC stock screener lists companies that do not trade their stocks through the Canadian stock exchange and in most cases it is through brokers. Most companies that trade in over the counter stocks are mostly new companies that are not capable of meeting the criteria for listing in any stock exchange in Canada.
Most of the trading done in over the counter stocks is through the internet or the phone. The stock price of over the counter stocks is not set through auction bidding but through negotiations of asking and bidding between the stock broker and market maker. You need to have an account with one of the various brokers that provide over the counter stocks for you to be able to trade in these stocks. You need to have a dedicated research for you to be able to successfully trade in OTC stocks and this is only possible if you will use an OCTBB stock screener. The best options will be those that have a sound market experience as well as strong analytical skills. The stock screener should also be user friendly where you will be allowed to do your searches using different criteria including stock price and history.
You need to keep in mind that it will be safer if you have extra income that you can put up for the high risk investment. It is also necessary to make sure that the brokers that you looking into have the experience required as well as reliable background.
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