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What are the risks involved with OTC stocks?
What are the risks involved with OTC stocks?
Updated over a week ago

Investors face greater risk when investing in more speculative OTC securities for a variety of reasons. Loose listing requirements can make it difficult to source accurate and timely financial information about many of these companies since the reporting standards are not strict. This can make it difficult to detect whether the company is performing well or is acting fraudulently. Additionally, OTC securities can be illiquid, be subject to large bid-ask spreads, trade infrequently, and may lack the market depth that can be found with most listed companies. These companies tend to be more volatile and experience larger price swings than more mature companies.

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