Pink sheet stocks are a type of over the market stocks. They’re not listed on major stock exchanges. Find out more about what pink sheet stocks are, some examples of pink sheet stocks and how to trade them.
Pink sheet listings are ones which aren’t listed on major stock exchanges such as Nasdaq, New York Stock Exchange (NYSE), or the London Stock Exchange (LSE). These are stocks sold over the counter (OTC) and are often penny stocks, which, as their name suggests, cost pennies to buy.
There are lots of companies which choose to trade over the counter but aren’t considered to be penny stocks, usually to keep the costs down.
Pink OTC or OTC Pink is one of the three tiers operated by the OTC Markets Group. The three tiers refer to how much financial reporting the companies offer up, with pink being the lowest tier.
Companies don’t have to jump through as many hoops to trade in the OTC Markets group – they don’t need to file with the Securities and Exchange Commission (SEC) or disclose company financials, as you generally see with traditionally floated companies.
There are more than 10,000 stocks on the OTC markets. Some are on it to avoid filing with the SEC, while others may have been delisted from other exchanges. Some companies on the OTC market include:
Here are some UK brokers that let you trade pink sheets. Double check that the provider you choose has the pink sheet stock you’d like to invest in on its platform.
| Provider | Does it trade pink sheets? | ||
|---|---|---|---|
 | Saxo Markets | Go to siteCapital at risk | |
 | eToro | Go to siteCapital at risk | |
 | IG | Capital at risk | |
 | Hargreaves Lansdown | Go to siteCapital at risk | |
 | Trading212 | Capital at risk | |
 | Revolut | Read reviewCapital at risk | |
 | Freetrade | Read reviewCapital at risk | |
 | Stake | Capital at risk | |
 | interactive investor | Go to siteCapital at risk | |
 | Aj Bell | Go to siteCapital at risk | |
 | Halifax | Read reviewCapital at risk |
These terms are sometimes used interchangeably but there’s a key difference. “Pink sheets” refers to the listing service, while penny stocks refer to the price of the stocks.
Penny stocks are stocks that trade for less than $5USD. Some penny stocks trade on well known stock exchanges such as Nasdaq or London Stock Exchange (LSE).
Pink sheet stocks tend to be cheaper but don’t necessarily count as penny stocks.
Pink sheet stocks and penny stocks are more risky than traditional stocks. There aren’t as many regulations or requirements and it can be difficult to fully research as the companies don’t need to release as much financial information as they do if they list on large stock exchanges. You can mitigate this risk by doing as much research as you can into the stocks you’re interested in.
As these stocks aren’t traded as often, considered to be “thinly traded stocks”, it can be difficult to make trades with profitability.
When trades and quotes were done physically, the paper was, you guessed it, pink! That’s it – the name stuck.
Pink sheet stocks and over-the-counter stocks can be a great opportunity for investors, but also a risky one. These companies aren’t held to the same standards as traditionally floated stocks which can make them hard to value and research. Double check that your chosen provider lets you trade the specific stocks you want, and make sure you know the fees.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Thinking about buying shares in Flutter Entertainment? We explain how to do it and compare a range of providers who will give you access to global markets.
Sales of Reckitt Bencksier products like Dettol have risen due to coronavirus. Here’s how you can invest in Dettol, by buying Reckitt Benckiser shares.
Ever wondered how to buy shares in AT&T? We explain how and compare a range of providers that can give you access to many brands, including AT&T.
Ever wondered how to buy shares in Wincanton? We explain how and compare a range of providers that can give you access to many brands, including Wincanton.
Ever wondered how to buy shares in United Utilities? We explain how and compare a range of providers that can give you access to many brands, including United Utilities.
Find out how to buy shares in RELX, see its share prices over the last three months and check out our must-do checklist if you’re looking to invest.
Ever wondered how to buy shares in Reach? We explain how and compare a range of providers that can give you access to many brands, including Reach.
Ever wondered how to buy shares in WPP Group? We explain how and compare a range of providers that can give you access to many brands, including WPP Group.
Find out how to buy shares in Merlin Entertainments, see Merlin Entertainments’ share prices over the last three months and check out our must-do checklist if you’re looking to invest.
We explain how to buy shares in Howden Joinery, explaining the costs and fees you could come up against. We also have a checklist for anyone looking to invest in a company.