OTC markets (Over-the-Counter) contain stocks that do not meet the requirements to remain listed on the NASDAQ. There are basically two types of OTCs:
- OTCBB (Over-the-Counter Bulletin Board) - These stocks are not required to meet any minimum annual sales or assets to be listed.
- Pink Sheets - These are the low of the low when it comes to stocks. They are not even required to register with the SEC.
Both of these are considered very speculative investments and are really meant for very experienced investors. Many new investors fall for the lure of the cheap stock price when dealing with these stocks. So be careful not to become another failed penny stock investor.