You should know that the Penny stocks are ordinarily proposed by a concern that has been established for less than three years and has under 5 million dollars net assets, or a concern that has a minimum of 3 years of operating time, and has less than 2 million dollars in net tangible assets or a company has 6 million dollars gross income for three years. There is a mature marketplace for the penny stocks, all the same these shares have very determined liquidity. This is merely one of the causes of the penny stock market’s volatility, nevertheless these markets remain very popular.
Penny shares, are now and again also termed as micro-cap, are low valued stocks ordinarily traded in the over the counter market. Most of the stocks and shares are obtainable for a penny that is why these are known as penny stocks.
OTCBB: OTCBB provides complete data for more than 3000 stocks including real time, quotes display, last price and quantities. These equities are usually not dealt with in any of the national stock exchanges. The Over The Counter Bulletin Board digitally supplies as they happen quotations for home as well as foreign stocks and ADRs, plus it shows past days trading activity in DPPs. There are in excess of two hundred market makers are certified at the OTCBB with over the counter or OTC bulletin boards chosen over pink sheets.
Pink Sheets: Pink sheets is issued and maintained by Pink Sheets LLC and it displays bid and wanted cited terms of various penny stocks. Companies named in pink sheets are the most high-risk as the majority of the businesses easily meet the minimal requirement for listing, even though penny stocks at pink sheets are thinly bought and sold. A great many businesses pay brokers] for dealing these penny stocks and thus some brokers|agents] employ deceptive activities to trade the stocks and shares and cheat funds from individuals.
In a number of the cases, only a couple of market makers are in reality engaged in a limited penny stocks and obtain and trade these particular sureties only. Handling a market maker is desirable, as the market maker not simply sells the particular stocks or shares but it in addition buys the stocks or shares. About two hundred and thirty market makers are accredited by the Over The Counter Bulletin Board and these market makers purchase and trade stocks and shares on a frequent basis. It’s in addition preferred to observe that a broader amount of market makers are around for unique stocks as the less market makers there are around, will often determine or control the unique stocks. In such a case the investment funds in the specific penny stock is high-risk as these few market makers can determine the terms of the stocks and shares and thus can maintain a wide spread between the buying and selling terms of the stock. Recently some of the market makers were found to be involved in dishonest activities.
There is a seasoned market of penny stocks that are dealt at OTCBB and pink sheets. OTCBB is governed by the rules of the SEC of the United States.
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