Can you buy over-the-counter (OTC) stocks on Etrade?

Yes, ETrade account holders can access a long list of over-the-counter (OTC) stocks.

However, it should be noted that the trading platform can restrict your orders when buying penny stocks. ETrade could also add limit orders to trade OTC equity securities.

This is ostensibly for your own protection since OTC investments maintain lower volumes and less liquidity.

For the most part, penny stocks are a waste of time and money. There is a reason why these securities are trading for a quarter or 50 cents. While there are some companies that are worth investing in (Hertz was a penny stock last summer, for example), you should steer clear 95 percent of these equities and find something that is valued more by the broader stock market.