OTC Pink

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.”

BREAKING DOWN '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. Pink Sheets

    A daily publication compiled by the National Quotation Bureau ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context ...
  6. Over-The-Counter Bulletin Board ...

    A regulated electronic trading service offered by the National ...
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. Options & Futures

    An Introduction To Swaps

    Learn how these derivatives work and how companies can benefit from them.
  8. Insurance

    Market Capitalization Defined

    Find out the differences between mega-, large-, mid- and small-cap stocks and how each suits different investing styles.
  9. Active Trading

    Why A Falling Stock Is Not Always A Bargain

    Learn how to successfully trade pullbacks and to avoid being crushed by "falling safes."
  10. Bonds & Fixed Income

    Credit Default Swaps: An Introduction

    This derivative can help manage portfolio risk, but it isn't a simple vehicle.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  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 derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  6. Do penny stocks trade after hours?

    Penny stocks are common shares of public companies that trade at a low price per share. These companies are normally small, ... Read Full Answer >>
Hot Definitions
  1. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  2. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  3. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  4. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  5. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  6. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
Trading Center