1. Over 2,000 OTC Stocks Under $1 Are Going To Disappear Overnight

The OTC Is About To Change Forever

For the last 10 years, I have Tweeted intraday news updates on micro cap stocks.

The OTC Market is about to undergo a huge transformation, and I have reactivated my newsletter from the stock promotion era to coincide with this landmark event. The amount of people that open and read this post will dictate the schedule of new updates, so replies and comments are encouraged.

The OTC is about to change forever:

The OTC has always been considered the Wild West of the greater market. Lower regulation at every level resulted in less-than-ideal scenarios for investors. It appears enough people have been burned by these consistent downward forces that real changes have been implemented and will impact everyone involved in the OTC from traders and brokers, to CEO's and lawyers.

To understand the scope and scale of this change, lets start with the fact there are ~3100 OTC tickers under $1, and four main tiers a company can be in:

• 780 in Pink Current

• 140 in Pink Limited

• 2,000 in Pink No Information

• 180 in Grey Market

These tiers are based on how much information a company disperses to investors - Pink Current being the highest tier with the most audited, up to date financials. Note that only 780 of 3100 (25%) of tickers under $1 are fully reporting.

Why does this matter? Well for the last 10 years, it hasn't! Companies in all tier levels were essentially considered equal by OTC traders, with some of the most fantastic opportunities coming from the lowest tiers. Nearly every "reinstatement" and "new filings" trade strategy involves a 'Pink No Information' company - a ticker would fall behind on financials, then signs of updating these documents would logically bring an increase of interest to the company.

The End of an Era:

In September 2020, the SEC updated Exchange Act Rule 15c2-11, which will become effective on September 28, 2021.

These changes “prevent brokers from displaying quotes for securities who don't meet public reporting requirements.” In other words, companies that do not file timely quarterly reports will no longer be available to trade!

Institutions are already beginning to block off entire tiers of the OTC. TD Ameritrade began this process by posting a new message on their platform:

"As of May 25, 2021, TD Ameritrade will restrict orders in Caveat Emptor designated OTC securities" -TDAmeritrade.com

All tickers in this category are now blocked from trading, and other platforms are issuing updates too.

Last month, eTrade went a step further alerting customers they will be restricting trades on over 2,000 tickers this upcoming September:

When eTrade and other brokers follow through with this announcement, they will wipe out 60% of the Sub-$1 OTC Market overnight. There are over 2,000 companies in the Pink No Information Tier according to OTCMarkets.com

This obliteration of the OTC in the months ahead will affect many aspects of the market. If reports show this post is well received, another update will follow where I will share several possible outcomes of this event.

What do you think will happen when the amount of tradeable tickers under $1 goes from 3,000 to 1,000 overnight?

-Rumors