OTC Pink

AAA

DEFINITION of 'OTC Pink'

The lowest tier of the three marketplaces for trading over-the-counter stocks provided and operated by the OTC Markets Group. The OTC Pink Marketplace offers trading in a wide range of equities through any broker, and includes companies in default or financial distress. Since it has no disclosure requirements, OTC Pink companies are categorized on the basis of information provided by them. OTC Markets somewhat euphemistically bills OTC Pink as “The Open Marketplace with Variable Reporting Companies.”

INVESTOPEDIA EXPLAINS 'OTC Pink'

Due to the variable nature of reporting by OTC Pink companies, they are classified based on the quality and quantity of information provided to investors as companies with Current Information, Limited Information or No Information.

“Current Information” companies are those that follow the International Reporting Standard or Alternative Reporting Standard by making filings publicly available through the OTC Disclosure & News Service. “Limited Information” companies include troubled firms in financial distress, bankruptcy, or those with accounting issues, as well as companies that are unwilling to meet the OTC Pink Basic Disclosure Guidelines. “No Information” companies are those that do not provide disclosure.
 

RELATED TERMS
  1. Pink Slip

    An informal or slang term referring to a notice of dismissal ...
  2. Taiwan OTC Exchange (TWO) .TWO

    An alternative securities exchange in Taiwan with listing criteria ...
  3. Pink Slip Party

    A party that brings together professionals and recruiters who ...
  4. Over-The-Counter - OTC

    A security traded in some context other than on a formal exchange ...
  5. Pink Sheets

    A daily publication compiled by the National Quotation Bureau ...
  6. Over-The-Counter Bulletin Board ...

    A regulated electronic trading service offered by the National ...
RELATED FAQS
  1. Can investors short sell pink sheet or over-the-counter stocks?

    Short selling is an effective trading strategy that can be employed to hedge the risk of a loss on an off-setting position ... Read Full Answer >>
  2. What does it mean when a stock trades on the Pink Sheets or the OTCBB?

    The stocks of well-known companies such as General Electric and Microsoft trade on major exchanges such as the New York Stock ... Read Full Answer >>
  3. What are the steps to get a company listed on the OTCBB?

    The over-the-counter bulletin board (OTCBB) is a regulated quotation service for over-the-counter (OTC) securities. The securities ... Read Full Answer >>
  4. How does a company move from an OTC market to a major exchange?

    The over-the-counter market is not an actual exchange like the NYSE or Nasdaq. Instead, it is a network of companies that ... Read Full Answer >>
  5. What is a "pink sheet" in the context of an OTC (over-the-counter) transaction?

    In the over-the-counter (OTC) market, pink sheets are daily publications with bid and ask prices of over-the-counter stocks. ... Read Full Answer >>
  6. What are the SEC (Securities And Exchange Commission) rules about OTC (over-the-counter) ...

    Market trades that occur over the counter (OTC) are less regulated by the Securities and Exchange Commission than those that ... Read Full Answer >>
Related Articles
  1. Investing

    The Over-The-Counter Market: An Introduction To Pink Sheets

    Being early to a party may not be hip, but being early on a rising stock certainly is.
  2. Investing Basics

    How To Play The OTC Pink Stocks

    The OTC Pink offers a variety of investment candidates including many good companies waiting to be discovered. Recently, the OTC Pink has worked hard to improve the service by tiering companies ...
  3. Investing Basics

    The Dirt On Delisted Stocks

    Listed securities are "the cream of the crop". Find out how a firm can lose that status and why you should be wary.
  4. Investing Basics

    Digging For Profitable Delistings

    Deregistration can provide opportunities for savvy investors. We'll show you how to cash in.
  5. Investing Basics

    OTCBB and OTC Markets Group

    The majority of larger companies that trade publicly choose to list their stocks on one of the major exchanges - the NYSE or Nasdaq. However, many companies are unable to meet the financial or ...
  6. Investing Basics

    Use Caution Trading Pink Sheet Stocks

    Pink Sheets stocks offer exciting opportunities to increase portfolio returns by large magnitudes in a short time. However, these opportunities come with significant risks. Investors need to ...
  7. Investing

    The Risks & Rewards of Penny Stocks

    Penny stocks can make you a lot of money in a short period of time, but this is a very dangerous game that almost always will leads to losses.
  8. Investing News

    Should You Invest In Fannie Mae Stock?

    If you're risk-adverse, you might want to avoid investing in Fannie Mae. But if you're up for it, high risk could translate to high reward.
  9. Insurance

    Credit Default Swaps: What Happens In A Credit Event?

    The credit crisis of 2008 prompted important changes to the settlement of credit default swaps.
  10. Investing

    Spot Hotshot Penny Stocks

    Don't flip a coin to find your next investment.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!