The Smart Money is on the OTC Big Board

Friday, June 16, 2006

Why the Smart Money is on the OTC

the OTC Big Board that is

The best penny stock opportunities are usually found on the OTC Big Board. OTC stands for Over the Counter, OTC stocks are stocks that do not trade on an exchange like the New York Stock Exchange (NYSE) or the American Stock Exchange (AMEX). The OTC Market is a lot like the NASDAQ (National Association of Security Dealers Automated Quotations) used to be. Smaller and younger companies are often listed on the OTCBB, and conservative investors tend to avoid them. However, there are a lot of solid earnings in the Over the Counter Market these days.

The real opportunities and the Apples and Microsofts of the next decade are probably OTC BB stocks at this point. OTC stocks can move up and get listed on the big exchanges, and if you own one when this happens it can be good. Also some companies get de-listed from the big exchanges and end up on the OTC, sometimes at a deep discount to actual value (case in point AEXCA), but often due to real world earning problems. If it is a solid company that ends up de-listed on a technicality it can be a great opportunity.

Savvy penny traders don’t pay much attention to where a stock is listed, but rather to its price relative to its fundamentals. The OTC is where I find most of my best opportunities, and gains of 100% or 200% are not that hard to come by with good research and timing. The OTC is the place to be for penny stocks. Ignore anybody who tells you different, and you’ll make a killing. The NYSE is for big institutional money and trust funds, etc. To make real money on the NYSE you need big money.

To make good money on the OTC you just need a couple thousand dollars, desire, persistence, courage, maybe a little patience, and lots of information. The OTC Big Board has opened up since the advent of online discount brokerages, and the small investor has more opportunities in this market than anywhere else, ever. And, the information you need is all over the internet, there are a lot of good services, my personal favorite place to get my information is yahoo, but there are tons of good services, and finding that perfect trade is half the fun. Give OTC stocks a chance if you haven’t before. I doubt that you will regret it unless you fail to diversify and do good research, and have bad luck with one bad pick. Do it right and your pennies will become dollars.