are all penny stocks otc

Thomas

I've been researching penny stocks and noticed that many of them are traded over-the-counter (OTC). However, I'm not sure if all penny stocks fall under the OTC category. Are there exceptions? Are penny stocks listed on major exchanges like NYSE or NASDAQ also considered OTC, or is there a distinction? I'd like to understand the relationship between penny stocks and OTC markets better.

Michael

No, not all penny stocks are OTC. While many penny stocks trade on OTC markets due to lower listing requirements, some penny stocks are listed on major exchanges like NYSE or NASDAQ. These stocks meet the exchange's minimum standards but still trade at low prices (typically under $5 per share). Examples include certain small-cap or distressed companies that maintain exchange listings.

Elijah

Penny stocks and OTC stocks overlap significantly, but they aren’t the same. Penny stocks are defined by their low price (usually below $5), while OTC stocks are defined by their trading venue (outside formal exchanges). Some penny stocks trade on OTC markets, but others may be listed on regulated exchanges if they meet specific criteria, such as minimum market capitalization or financial reporting standards.

Oliver

I’ve heard that OTC stocks are riskier because they’re less regulated. Does that mean penny stocks on major exchanges are safer?