Many more similarities exist than do differences when it comes to capital markets around the world,
    but for many in the U.S., there exists two types of stocks, those that appear in their daily newspaper, and
    those that do not.  An assumption is usually made that all of the stocks listed in the newspaper are the
    most widely held and the most active available.  A second assumption would follow that Unlisted stocks
    are the most thinly traded with no transparency and are the hardest to get in and out of, especially out.  Both
    of these assumptions would be false, especially if we consider the facts.  Each day, 1000’s of unlisted
    stocks see more dollar volume than 1000’s of listed stocks.  In fact, the similarities between listed and
    unlisted stocks are those that provide security and transparency, such as real time level II quotes and SEC
    filings.  The differences are minimal, and include several positives for the average retail investor.

The most observable difference between listed and unlisted stocks is in and of itself a very big positive for
traders, and is the idea that unlisted stocks do not have any threat of being delisted, as listed stocks do,
and their only goal is to become listed, which is always constructive for shareholders as opposed to
becoming delisted.  Nevertheless, this carefree, anything goes environment can be similar in nature to the
Wild West, and one will definitely need to be well prepared.  Every assortment of possible ranges of
compliance with respect to timely reports to shareholders and the SEC can be witnessed in the unlisted
world.  You will find that the most heavily traded stocks will usually be the ones filing the most complete
reports.  This is no different than in the listed world, there are just a lot more people willing to cover listed
stocks, which is exactly why their rules are a lot more stringent.  You may not have ten different analysts
initiating buy and sell coverage on your stock in an unlisted environment, and you may not have a special
congressional investigative committee to audit your companies financial documents, however, making your
own independent decisions in this setting becomes a lot easier.  Light coverage and lack of man power
are aspects that one needs to keep in perspective when deciding how much of their overall portfolio to
allocate towards Penny Stocks and the unlisted world.  With every bit of added risk, however, comes added
reward potential.

           Without dissecting the different components of the unlisted world, one clear difference is the lack of
    early morning and after hours trading opportunities.  You simply cannot trade OTC BB or Pink Sheet stocks
    before 9:30AM EST or after 4:00PM EST unless you are a market maker.  Liquidity providing firms will
    sometimes trade shares between themselves just before or after market hours, and these stocks will often
    be big movers throughout the regular trading day.   The actuality that these stocks will not budge for more
    than thirty-two and a half hours a week is a blessing in disguise, considering how much attention they
    should receive in ones portfolio.  Checking the price of your stocks several times throughout the trading
    session is essential as this is not the place to practice buying and holding, but at least when the bell rings
    there is a definitive end until the next trading session begins.  All in all, trading unlisted stocks requires a
    little extra effort, however, every tool that you need is available, you just have to be willing to look a little
    further than your daily newspaper.
    Pros & Cons of Micro Cap Investing
    PSW Staff
©2010 Penny Stocks Weekly  -  Home  -  PSD 10  -  Terms  -  A Message From The SEC  -  Important Information On Penny Stocks
Free, unbiased analysis & opinion on small & micro cap stocks
You need Java to see this applet.
Login:Password:  
    Enter Symbol, Company Name or Keywords:
    Learning Center
    Free Premium Subscription Offer

    Full article access includes Buy, Sell & Stop-Loss conditions along with a no nonsense
    trading strategy.  Don't jump in blind, subscribers also get a detailed risk analysis,
    suggested position weight and time horizon ideas.  Also access our Small & Micro Cap
    portfolio.

    Get started for free right now with our weekly newsletter.