What Happens To OTC Stocks
A question that I'm asked over and over again by new traders is what will happen to their OTCBB stock should it move from the OTCBB to a major exchange like the NASDAQ.
Unless some special arrangement has been made, and you will know this from your brokerage firm, your stock will automatically transition to the Nasdaq.
This scenario is called a jumper. There is a good chance that your stock shares will gain in value because it opens your stock up to a whole new set of investors who only trade on major exchanges.
If a change occurs in the ticker symbol, your brokerage house (Scottrade, Ameritrade, and so on) will contact you by your trading account and by regular snail mail.
But let me be clear about something. You are stupid if you think you can pick jumpers and make money at doing this.
Tom Cruise Crazy publishers will try and sell you an expensive subscription for stocks that go from the OTC to the Nasdaq. Jumpers that you can make 1,000%...3,500%, even 10,000% and more! Don't believe it. It's a scam.
In the hundreds of traders I've spoke with over the years, not one of them has told me that he made money from picking jumper stocks more than he lost.
Time for a splash of cold water on your face to bring you out of Fantasy Land. There is not a big cost different between a NASDAQ listing and an OTC listing. If this hot, insider tip company was making so much money selling such a hot product then why didn't they just list on the NASDAQ in the first place? Why even list on the OTCBB? The reason is not the cost. The reason is the reporting requirements. Companies that list on the OTCBB don't want to provide you with timely, behind the scenes financials that were audited by an independent party. That should scare you completely away from OTCBB listed stocks.
Enlightening truth: the primary reason a company lists on the OTC instead of the NASDAQ is to not have to meet the higher reporting requirements for that listing. They really don't want to be bothered with letting investors know what is REALLY going on behind all the PRs they release.
The only exchange fraught with more danger than the OTCBB is the pink sheets. But still, the OTCBB has thousands of fraudulent companies listed on it that will be delisted within a year and the CEO brought up on fraud charges by the SEC. Over many years, investing in the OTCBB because you want to bag a jumper stock will make you go broke. I should know, it happened to me. Yes, I'm a former jumper stock investor. As the saying goes, he who has grabbed a bull by the tail knows twice as much as he who never has. Don't go grab the bull by the tail. Learn from my painful experience.
Here's something to think about. The main reason people gamble in the OTCBB market is to get really cheap stocks. Now that we are at a market bottom, many good companies listed on major exchanges are at very low OTCBB like prices! - 23226
Unless some special arrangement has been made, and you will know this from your brokerage firm, your stock will automatically transition to the Nasdaq.
This scenario is called a jumper. There is a good chance that your stock shares will gain in value because it opens your stock up to a whole new set of investors who only trade on major exchanges.
If a change occurs in the ticker symbol, your brokerage house (Scottrade, Ameritrade, and so on) will contact you by your trading account and by regular snail mail.
But let me be clear about something. You are stupid if you think you can pick jumpers and make money at doing this.
Tom Cruise Crazy publishers will try and sell you an expensive subscription for stocks that go from the OTC to the Nasdaq. Jumpers that you can make 1,000%...3,500%, even 10,000% and more! Don't believe it. It's a scam.
In the hundreds of traders I've spoke with over the years, not one of them has told me that he made money from picking jumper stocks more than he lost.
Time for a splash of cold water on your face to bring you out of Fantasy Land. There is not a big cost different between a NASDAQ listing and an OTC listing. If this hot, insider tip company was making so much money selling such a hot product then why didn't they just list on the NASDAQ in the first place? Why even list on the OTCBB? The reason is not the cost. The reason is the reporting requirements. Companies that list on the OTCBB don't want to provide you with timely, behind the scenes financials that were audited by an independent party. That should scare you completely away from OTCBB listed stocks.
Enlightening truth: the primary reason a company lists on the OTC instead of the NASDAQ is to not have to meet the higher reporting requirements for that listing. They really don't want to be bothered with letting investors know what is REALLY going on behind all the PRs they release.
The only exchange fraught with more danger than the OTCBB is the pink sheets. But still, the OTCBB has thousands of fraudulent companies listed on it that will be delisted within a year and the CEO brought up on fraud charges by the SEC. Over many years, investing in the OTCBB because you want to bag a jumper stock will make you go broke. I should know, it happened to me. Yes, I'm a former jumper stock investor. As the saying goes, he who has grabbed a bull by the tail knows twice as much as he who never has. Don't go grab the bull by the tail. Learn from my painful experience.
Here's something to think about. The main reason people gamble in the OTCBB market is to get really cheap stocks. Now that we are at a market bottom, many good companies listed on major exchanges are at very low OTCBB like prices! - 23226
About the Author:
By Sam Nielson. To find more million dollar trader articles go to what happens to my stock when it goes from otc to nasdaq
posted by X - Men @ 3:27 AM
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