OTC stocks are those which trade publicly outside of a major securities marketplace, or stock exchange. OTCQX and OTCQB are two major marketplaces that facilitate the buying and selling of OTC stocks. Stocks that trade in this manner typically don’t meet listing qualifications for a major exchange (like NYSE or NASDAQ), or they have been delisted from one of those exchanges. Also referred to as “pink sheet” stocks, OTC securities don’t have anywhere near the liquidity offered by major exchanges, but they do provide penny stock traders an additional pathway to acquire a large amount of cheap shares. Many discount/zero-commission brokers offer OTC trading, but they may charge fees.
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