How do OTC (over-the-counter) stocks work?

OTC stocks are the equity and debt securities that trade over-the-counter, or "pink sheets."

Most people believe these kinds of purchases are unsafe and offer low returns.

The truth is as follows:

The stocks offered by this market qualify for riskier investments (between high to low) with higher than average profit potential.

The risk is magnified because the regulations governing these sorts of securities are much less precise.

A good broker is essential for knowledgeable advice, but technically it's still possible to make money trading in this segment even without a financial advisor.

It should be noted, however, that OTC investors typically will not have any official ownership rights. These types of stocks also tend to carry increased credit.