There are not many listing requirements to trade on the allfrequencyjammer OTCBB. Over the counter is nether a stock market nor a stock exchange. Therefore to become listed or remain listed the requirements are minimal. If a company does not meet the minimum requirements, they move from the penny stocks to the pink sheets. OTCBB companies must file with the SEC to remain in good standing and must continue to file on time or they will be moved to the pinksheets. Companies that can not remain current become delinquent. The symbol “E” is added to these delinquent companies trading symbols. There is a 60 day grace period where the company can regain its status as a reporting company and have the “E” removed from the symbol. After this period, essentialwell the company is delisted.
“Pump and Dump” schemes newzhit are frequently committed on the OTCBB exchange. This scheme involves buying low priced over the counter stocks, running up the price of the stock without reason and then selling those shares to unsuspecting investors. There are many methods used to drive up the price of an OTCBB stock. The most common method involves forums. There are many penny stock forums where trader gather to discuss stocks. OTCBB stocks are priced anywhere from 5.00 to under a penny, with some trading as low as.0001, these stocks can run up hundreds to thousands of percent in a day. These large runs are not uncommon and the forums are full of traders waiting for a stock to run. The criminal element, capcounter then buys a large amount of shares at a low price and begins to push the stock through the forums driving up its price. At time companies are also involved and pay for “promotions” of the their companies so they can sell their shares at a higher price.
Not only does a micro cap trader have to worry about companies profiling their stock for gain, the forum hot stock picks that push up the price, but they also have to worry about insider fraud. The best way to trade the OTCBB stock is with knowledge, taking the time to read the SEC filings, calling the transfer agent to learn about the share structure, and contacting the companies investor relations department. Even when you complete all these steps and feel comfortable about the company, appoura you watch the chart and buy at what you feel is a good price, you can still be the victim of fraud.
Many times insiders garner control of the companies shares, they issue press releases touting how great their company is and what a great future they have. The company shows a solid share structure but behind the scenes, the insiders are diluting shares while planning on filing later or filing falsely. Then as the price skyrockets they “dump” the shares into the market. No one understands what happened but all the investors are left with nothing. This happens very often when trading OTCBB stock. If the fraudsters are not caught they will file for a reverse split, removing most or all of the shares they just dumped from the market while creating a nice looking share structure for the company. Then they file for a name and symbol change while planning to commit fraud again. These are no small time crimes, some of these scams rake in millions of dollars. For more info please visit here:-buzzindeed.com
OTCBB Stocks consist of penny stocks, the grey sheets, the pink sheets, micro cap stocks, nano cap stocks, small caps etc… you can make money trading these over the counter stocks you just need to be careful and do your homework!