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OfflineCLIT
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do people actually make money on the OTC stock market?
    #23751037 - 10/19/16 02:43 AM (7 years, 3 months ago)

I've seen some stocks there rise like crazy! It's mostly penny stocks. Say a penny stock could rise to 2 pennies which is a 50% rise. Anyone with $1 million dollars in such a stock would have made 50% return. Right?


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OfflineBrian Jones
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Re: do people actually make money on the OTC stock market? [Re: CLIT]
    #23751197 - 10/19/16 05:50 AM (7 years, 3 months ago)

I don't think so. They are loser stocks. That's why they are penny stocks. They go bankrupt constantly.  There's potential, but there is potential in lottery tickets too.

    IDK, GeoKills is the most informed person on this category, and he knows things I don't know.


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I don't want no commies in my car. No Christians either.

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Offlineqman
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Re: do people actually make money on the OTC stock market? [Re: CLIT]
    #23751458 - 10/19/16 09:21 AM (7 years, 3 months ago)

Quote:

CLIT said:
I've seen some stocks there rise like crazy! It's mostly penny stocks. Say a penny stock could rise to 2 pennies which is a 50% rise. Anyone with $1 million dollars in such a stock would have made 50% return. Right?




It depends on the sector and the fundamentals.

Many natural resource stocks can get killed from lower commodity prices and end up in the under $1 range, that doesn't mean they're going to end up bankrupt.

In fact, fortunes can be made in this fashion. Many uranium companies in the early 2000's went from .05 to $10 in a matter of a few years. Just imagine if you had just 100,000 shares.

I can't speak for the other sectors of the markets, but for natural resource stocks, trading under $1 is commonplace.


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OfflineCLIT
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Re: do people actually make money on the OTC stock market? [Re: qman]
    #23753732 - 10/20/16 12:35 AM (7 years, 3 months ago)

Like the marijuana stock from the new company Marijuana Company of America, trading under the stock "MCOA"?


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OfflineCLIT
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Re: do people actually make money on the OTC stock market? [Re: qman]
    #23753875 - 10/20/16 02:09 AM (7 years, 3 months ago)

were those uranium companies trading on OTC or Wall Street?

Quote:

qman said:
Quote:

CLIT said:
I've seen some stocks there rise like crazy! It's mostly penny stocks. Say a penny stock could rise to 2 pennies which is a 50% rise. Anyone with $1 million dollars in such a stock would have made 50% return. Right?




It depends on the sector and the fundamentals.

Many natural resource stocks can get killed from lower commodity prices and end up in the under $1 range, that doesn't mean they're going to end up bankrupt.

In fact, fortunes can be made in this fashion. Many uranium companies in the early 2000's went from .05 to $10 in a matter of a few years. Just imagine if you had just 100,000 shares.

I can't speak for the other sectors of the markets, but for natural resource stocks, trading under $1 is commonplace.




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Offlineqman
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Re: do people actually make money on the OTC stock market? [Re: CLIT]
    #23754226 - 10/20/16 08:17 AM (7 years, 3 months ago)

Quote:

CLIT said:
were those uranium companies trading on OTC or Wall Street?

Quote:

qman said:
Quote:

CLIT said:
I've seen some stocks there rise like crazy! It's mostly penny stocks. Say a penny stock could rise to 2 pennies which is a 50% rise. Anyone with $1 million dollars in such a stock would have made 50% return. Right?




It depends on the sector and the fundamentals.

Many natural resource stocks can get killed from lower commodity prices and end up in the under $1 range, that doesn't mean they're going to end up bankrupt.

In fact, fortunes can be made in this fashion. Many uranium companies in the early 2000's went from .05 to $10 in a matter of a few years. Just imagine if you had just 100,000 shares.

I can't speak for the other sectors of the markets, but for natural resource stocks, trading under $1 is commonplace.







Both, lots of resource stocks are Canadian based companies, therefore US investors buy them OTC.


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OfflineCLIT
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Re: do people actually make money on the OTC stock market? [Re: qman]
    #23756750 - 10/21/16 01:41 AM (7 years, 3 months ago)

Isn't there a different set of rules for OTC stocks in that you may not sell them right away? Let's say I bought stock today and it rose 50%, I won't be able to sell them off for a profit so I must wait?


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Offlineqman
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Re: do people actually make money on the OTC stock market? [Re: CLIT]
    #23757266 - 10/21/16 08:08 AM (7 years, 3 months ago)

Quote:

CLIT said:
Isn't there a different set of rules for OTC stocks in that you may not sell them right away? Let's say I bought stock today and it rose 50%, I won't be able to sell them off for a profit so I must wait?




Nope, OTC trades no differently. The only negative can be lack of volume on certain days.


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OfflinegeokillsA
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Re: do people actually make money on the OTC stock market? [Re: CLIT]
    #23757388 - 10/21/16 09:05 AM (7 years, 3 months ago)

Rather than saying that there are a different set of rules for OTC stocks, it would be more accurately stated that there are a lack of rules for OTC stocks. They are not bound by the same SEC regulations that require the release of regular and reliable financial information pertaining to the underlying company. This is one of the reasons I would never consider them investible, as in the vast majority of cases, you don't have a clear picture of what is going on with the company and your investment is in fact purely speculation.

The second major problem, as qman noted, is volume. If a $0.05 stock trades 100,000 shares in a day, that's only $5,000 worth of stock changing hands in a given day. So in effect, it is practically impossible to buy a large amount of stock at the current price, because you will soak up the supply (i.e. buy out all of the available shares for sale) almost immediately. Because of the fundamental law of supply and demand, if you buy out all the supply at $0.05, you're going to end up having to offer more money per share to convince other holders of the stock to sell. The inverse is also true. If you have accumulated, say a million shares of a $0.05 stock that trades 100,000 shares on an average day, it's going to take you 10 days of average trading volume to unload it. Rest assured that if you're blasting out your stock for 10 days in a row, the share price will begin to plummet, and you will be getting less and less money for each share you sell, as you overwhelm the available demand from willing buyers, thus having to entice more buyers to come to the table by lowering your asking price.

Penny stocks are at best a lottery ticket and at worst a "pump and dump" scam, where unscrupulous hacks will buy up a bunch of stock, blast out a ton of positive (and often fabricated) PR, and dump their shares in the frenzy of uninformed investors who have just read about "the next best sleeper stock that is about to quadruple in value".


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Offlineqman
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Re: do people actually make money on the OTC stock market? [Re: geokills]
    #23757570 - 10/21/16 10:16 AM (7 years, 3 months ago)

Most of the OTC resource stocks I buy and own also do trade on the Toronto Stock Exchange with much higher volume than the US OTC stocks, I can also buy them on that exchange as well. 

Fidelity lets you buy on stock on any exchange in the world, you just have to convert US Dollars to the currency on that exchange, OTC just lets you do it without the hassle.

The most important part of a stock is the market capitalization, not stock price. I could care less if a $500 million market cap stock is trading at .89 cents or 6 dollars.


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OfflineBrian Jones
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Re: do people actually make money on the OTC stock market? [Re: geokills]
    #23759850 - 10/22/16 02:18 AM (7 years, 3 months ago)

Quote:

geokills said:
Rather than saying that there are a different set of rules for OTC stocks, it would be more accurately stated that there are a lack of rules for OTC stocks.  They are not bound by the same SEC regulations that require the release of regular and reliable financial information pertaining to the underlying company.  This is one of the reasons I would never consider them investible, as in the vast majority of cases, you don't have a clear picture of what is going on with the company and your investment is in fact purely speculation.

The second major problem, as qman noted, is volume.  If a $0.05 stock trades 100,000 shares in a day, that's only $5,000 worth of stock changing hands in a given day.  So in effect, it is practically impossible to buy a large amount of stock at the current price, because you will soak up the supply (i.e. buy out all of the available shares for sale) almost immediately.  Because of the fundamental law of supply and demand, if you buy out all the supply at $0.05, you're going to end up having to offer more money per share to convince other holders of the stock to sell.  The inverse is also true.  If you have accumulated, say a million shares of a $0.05 stock that trades 100,000 shares on an average day, it's going to take you 10 days of average trading volume to unload it.  Rest assured that if you're blasting out your stock for 10 days in a row, the share price will begin to plummet, and you will be getting less and less money for each share you sell, as you overwhelm the available demand from willing buyers, thus having to entice more buyers to come to the table by lowering your asking price.

Penny stocks are at best a lottery ticket and at worst a "pump and dump" scam, where unscrupulous hacks will buy up a bunch of stock, blast out a ton of positive (and often fabricated) PR, and dump their shares in the frenzy of uninformed investors who have just read about "the next best sleeper stock that is about to quadruple in value".




  Thank you, and I mean this with zero sarcasm, but relatively speaking,  It's like God came down to give us the news.

    This guy knows  equities, he knows real estate. I don't, but I know enough to know knowledge when I hear it. If I was a rich guy, I would hire him, but I'm not so I will keep buying Vanguard Index Funds, which is a good choice for regular guys to get regular gains. It's always's risky to try to make to make the quick buck. Usually you end up with nothing.


Edited by Brian Jones (10/22/16 04:52 AM)


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