0

Will I always be able to find a willing buyer/seller for stocks that trade on the OTC markets? In other words, are there market makers for OTC stocks similar to the market makers for NYSE and NASDAQ listed stocks? I am particularly interested in the situation for stocks on OTC Markets' OTCQX and OTCQB tiers.

1 Answer 1

1

Probably not.

OTC markets (also known as 'Pink Sheets') tend to have names that do not meet the listing criteria for larger exchanges. As a result there is less liquidity and less incentives for market makers to participate in those names.

That is not to say that market makers won't make markets in the name, they may choose to do so. The OTC markets may adopt schemes to encourage market makers to make markets, but it is unlikely there would be a guarantee that there would be market makers willing to make markets in such a name with a reasonable spread.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .