Last Updated: 25 January 2017
Like any other stock you would buy, you can buy penny stocks through your normal online stockbroker — normally such stocks are listed on the OTC or Pink sheets, but sometimes on the AMEX, Nasdaq or NYSE.
The main difference between stocks on the OTC or Pink Sheets versus stocks on AMEX, Nasdaq or NYSE is the listing requirements of the various exchanges. The later exchanges have strict listing requirements, and while they might not allow for as much of an upside as “true” penny stocks can, they tend to be less volatile. More often, though, penny stocks trade on listing services like OTCBB and Pink Sheets.
Over-the-Counter, or OTC is a quotation. Unlike Pink Sheets, which is just a quotation publisher, OTC maintains listing requirements (though they’re less stringent than those of an exchange). For this reason, OTCBB has added legitimacy.
Pink Sheets is a system that provides investors with quotation information on stocks that are registered with it. Unlike OTCBB, however, Pink Sheets isn’t registered with the SEC and doesn’t enforce any listing requirements.
With all the risk involved, why would anyone want to put his or her money in a penny stock anyway? The answer is volatility.
Because penny stocks subject to greater volatility, many people believe that they’ll luck out with a stock that will jump from $0.08 to $8 in two weeks. And it’s happened, many times in fact. Scour enough investing message boards and you’re sure to find success stories from investors who made a fortune while “playing the pennies.”
Companies that can successfully make the jump from penny stock to power stock are rare, but when you find them they pay out in spades. Numbers vary, but investors have raked in gains over 1,000% in a couple weeks’ time. The real trick is finding the right penny stock. That’s where Ultimate Penny Stock Alerts helps our members. We help find those undiscovered penny stocks that have the potential to triple or quadruple digit gains, or even be the next “10 bagger”.