New Housing Starts Up and Homebuilders Starting to See the Light Again

In the middle of April, we posed the question, Is now the time to get back into the home builders? With the Philadelphia Housing Index ($HGX) having closed at $79.89, we cited several reasons why we felt it was, in fact, time to get the sector back on the radar. We cited, an unexpected sales jump in February and a ...

Making Money as Baby-Boomer Generation Retires

America's 78 million baby boomers are richer than any group in history; the group controls 50% of all U.S. discretionary income and accounts for 75% of drug spending. As an investor you cannot afford to ignore this demographic in the coming years and where they will be spending their retirement money. As ...

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A Primer on the OTC Bulletin Board

The OTC Bulletin Board (OTCBB) is a regulated quotation service that displays real time quotes, last-sale prices and volume information on OTC equity securities. The OTCBB provides access to more than 3,300 securities and includes more than 230 participating market makers.

There is one primary difference between penny stocks quoted on the Pink Sheets and those quoted on the OTC Bulletin Board. All OTCBB listed companies are required to file their updated financial reports with the SEC. This is not required for stocks listed on the Pink Sheets. Any company that does not file timely reports is removed from the OTCBB. On failure to file the required document, the SEC adds a fifth letter “E” to the company’s ticker and the company is provided a 30-day period to file with the SEC. If the company fails to meet this, its ticker stands to be removed from the OTCBB and must re-apply for listing.

The Penny Stock Reform Act of 1990 required the SEC to establish an electronic system to facilitate the widespread publication of quotation and last-sale information in the OTC securities. The OTCBB was then set up in June 1990 on a pilot basis to provide transparency in the OTC equities market. Firms are now required to report all trades in the domestic OTC equities security through an Automated Confirmation Transaction Service (ACT) within 90 seconds of the transaction.

What is a Penny Stock?

There is no single accepted definition of a penny stock. Some people refer to them as stocks that trade for less than $1, others set the cut off point at $3, while some deem a penny stock anything that trades below $5, so there are a variety of opinions as to what share price determines the penny stock. However, the Securities Exchange Commission (SEC) has defined penny stocks as low price stocks of small companies generally trading under $5. While penny stocks generally trade “over the counter,” they can also trade on U.S. securities exchanges such as the NYSE, AMEX or NASDAQ. Many can also trade on foreign exchanges such as Canada and Germany.

Penny stocks are a high risk / high reward undertaking and a large number of investors keep away from them, largely due to the fact that one could end up losing money due to amount of risk involved. But if investing prudently, one could make huge profits by investing in fundamentally strong penny stocks, as they can be bought for a few cents per share and ultimately sell for several dollars per share.

Penny Stocks MicroCap PennyStocks Newsletter by OTCPicks

Penny Stocks microcap stocks trading on Pink Sheets Nasdaq OTCBB can move quickly. OTCPicks Small Cap PennyStock Newsletter offers information on PennyStocks MicroCap Stocks and OTCBB Penny Stocks.

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Penny Stocks MicroCap PennyStocks Newsletter by OTCPicks

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