How to Trade Pink Sheet Stocks

Written by steve johnson
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How to Trade Pink Sheet Stocks
Pink sheets are traded on the stock market (stock market analysis screenshot image by .shock from Fotolia.com)

Prices for stocks which are traded in the over-the-counter (OTC) markets are published as so-called "pink sheets" by the National Quotation Bureau. These types of stocks do not fall under the same regulations as those traded on the New York Stock Exchange (NYSE). Therefore, pink sheets stocks are not required to make filings with the U.S. Securities and Exchange Commission. By trading pink sheets successfully, it is possible to make a profit in the OTC markets.

Skill level:
Moderate

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Things you need

  • Online stock broker

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Instructions

  1. 1

    Find the ticker symbol for the stock. The ticker symbol identifies the stock using an abbreviation. Ticker symbols for pink sheets will always end in ".PK." The ticker symbol for any public company can always be found on its website under the "Investors" or "Investor Relations" section.

  2. 2

    Enter the ticker symbol into your broker's search function to get a quote. The quote will show you the price for one share of the stock. For example, if stock ZYX is quoted at £52 per share, this means that one share of ZYX costs £52.

  3. 3

    Enter the ticker symbol into your broker's order form and enter the amount you wish to purchase. Using the example from Step 2, if you wanted to purchase 200 shares of ZYX at £52 per share, the calculation would for the total cost of this order would be as follows:

    200 x £52 = £10,400

    This order would cost £10,400, plus commission.

  4. 4

    Place the order. By submitting the order, your broker will automatically fill the trade at the next available price. This trade will execute immediately and you will now own the pink sheets.

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