Why Do You Need to Know About the OTCBB?
There are many new penny stocks being listed and traded on the OTCBB each and every day. However, not everyone that goes out and trades on the OTCBB is doing so with the best of intentions. Many people are just after the fast profit that the trading promises to deliver them, but not all of those people know what they are getting into.
There are some major differences between the hot penny stocks on the OTCBB and the ones that are more well known and have the reputation of having great trading results. First, in order to trade on the OTCBB you need to have a trading account. While there are no minimum requirements for opening an account with the company for trading purposes, it would be wise to do so if you intend to use the robinhood platform as your means for trading.
Another difference is the way the trades are handled on the OTCBB platform. You will not find a physical exchange, like you do when you trade penny stocks on the NYSE and NASDAQ. Instead, what happens on the OTCBB is that you have your order up on the platform, and once you approve of the trade, it gets placed into execution. If you approve of the trade, the sell order will be liquidated immediately. This is how the penny stocks on the OTCBB work.
robinhood is one of the best trading platforms on the OTCBB. They have the ability to provide you with a real time line of what the penny stocks you are looking at are doing. They also have the ability to provide you with charts and graphs that can show you the performance of the penny stocks over time. These charting tools are very helpful to penny stock traders.
Because it is not required for you to open an account on the OTCBB, it does not have the same listing requirements as other markets. The only thing they do require is that you have a brokerage account. This is because you cannot invest with your regular savings account in these types of stocks. This is not something you can do with a traditional bank.
The biggest thing that sets robinhood apart from other trading platforms is that they give you a choice of many different exchanges to trade your stocks on. This allows you to diversify your investments. Instead of getting involved with just one exchange, you can trade on all of them. The two exchanges they offer you are the New York and the NASDAQ. So even if you are not comfortable trading penny stocks on the larger exchanges, you still have the option to do so on the OTCBB since the other two are not available.