Prof. Tyler yamazaki

Listing in Pink Sheets
For a company to get started with Penny Stocks, they will first need to file
the Form 211 in order to be listed in Pink Sheets. This is a privately held
corporation, compared to the other option (which we will talk about later)
over-the-counter Bulletin Board, which is a service that is owned by the
NASDAQ. There are many companies that use Pink Sheets to work with
and when they fill out the Form 211, they will need to submit it over to the
OTC Compliance Unit. The market maker is going to process the listing for
the company. The broker and dealer will be able to quote a price for this
company, as long as the company is pretty transparent. However, there are
some companies that won’t commit to this transparency because they won’t
submit their current information on business financials.
For the companies that are listed using the Pink Sheets, you will find that
they are often small setup. This company will not have to work with the
SEC during the trading time and they don’t have to file their periodic
reports. Now some of them will do this filing in order to show what they are
doing and to help the investor feel more comfortable investing in them, but
this is not mandatory. In many cases, it can be difficult to get information in

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order to understand companies that are on the Pink Sheets because you just
don’t have the information that is needed to get started.
The Benefits of Trading Pink Sheets
Despite the fact that the companies who use Pink Sheets are not required to
be transparent or file periodic updates, an investor is usually going to find
some pretty good options to trade in Penny Stocks with these Pink Sheets.
You have the possibility of getting a high return because these are the
Stocks that are volatile. There are also some companies that are in this
group that used to be strong, but for some reason or another had to leave the
major exchanges because of a strict requirement they no longer met. They
may still be good companies to trade with and you could make some good
profits from it.
It is also possible to find obscure companies to trade with in order to help
that company grow before they move over to one of the major exchanges.
You would be able to invest with these companies early on and this could
give you a huge reward later as they start to grow and move over to the
Stock Exchange.
In addition, the Pink Sheets system has a tier system that helps you to
differentiate between the companies that are there. This helps you to figure
out which Stocks are higher risk and which ones are lower risk based on the
classifications that are set. You are able to pick whichever risk setting that
you are happy and comfortable with, but as a beginner, it is nice to know
which ones fall into each category to help you make a decision.
If you want to use the Pink Sheets as part of your trading strategy, you need
to make sure that you really do your research. Pink Sheets is not going to
provide you with much information about the companies you are trading
with and if you just randomly pick a company, you are increasing your risk
and making it likely that you will lose all of your money.