There is nothing more frustrating than looking for an OTC stock quotation and getting the wrong information. It does not matter if you are an avid investor, CEO of a company or casual follower of the Over the Counter markets, it is simply aggravating.
Executives of small, publicly traded companies express concern over websites that do not have bid and ask prices accurately posted and justifiably so. For a website such as Yahoo Finance, the most frequented financial website on the web, it is mind-blowing that they do not pull data from multiple sources to ensure that investors are getting correct information. To further explain an executive’s position, let’s hypothesize about a situation. (Honestly, “hypothesize” is a very forgiving term as this situation happens regularly.)
Let’s say that the CEO of an OTC company that is trading at $.25 receives a phone call that potential investors are not interested in buying stock of the company because websites have the bid listed at $.10 and the ask listed as $1.00. Understand that not all investors are traders and many do not use brokers that provide real-time and accurate data, so often times, they do not know about live quotations or fully understand how the quotation system works. Many only know what is presented before them with regards to ask, bid and last pricing and how it pertains to them buying shares of a company. Think the CEO is frustrated when he is looking at live L2’s through a broker where quotations are pulled from multiple sources, and the actual quote is bid at $.24 and ask at $.26? How about the potential investor that walked away from the opportunity if the stock later doubled?
Why this happens from a technical level is pretty simple. The website is only pulling market data from the OTCBB and not pulling Pinksheets quotations as well. Why this is happening from a fundamental level is not easily answered. Through research, it has been discovered that many CEO’s have attempted to engage websites such as Yahoo Finance to address this concern. None of them reported any success. However, there are rumors that Yahoo Finance is going through a “revamping,” although whether or not this critical aspect of quotations is going to be reconstructed or not was not confirmed.
Let’s also examine the extensions, “.pk” and “.ob” for a moment. These extensions were created by Reuters many years ago and were adopted by several websites with apparently the intention of identifying the two levels of the OTC exchange, but are these extensions really necessary? None of our other exchanges, the NYSE, NASDAQ or AMEX, use extensions. By these standards, NASDAQ-listed companies should have “.GS” or “.CM” after their tickers to show if they trade on the Global Select or Capital Markets. The ticker symbol identifies the company just fine for the millions of investors in the world. While these do have a purpose in mind, the concept seems archaic and actually creates confusion. Not to mention that there are plenty of stocks which have no market makers and are traded on the “Grey Markets.” Honestly, if any stocks should be identified through an extension, it should be these. But, then again, what happens if the company moves from the Grey Markets? Guess that means it would be time to change the ticker again. The whole concept of extensions creates confusion in and amongst itself and is really, quite simply, unnecessary.
A final source of aggravation is delayed quotes. Why any website still provides these is beyond us. For active traders, delayed quotations are basically useless for a stock with any sort of volatility. For a stock that is actively traded, it is almost unexplainable as to how much activity a stock price can experience over the course of a 20-minute delay, so looking at financial sites that provide data in this fashion serves very little purpose. In defense of many smaller websites, it is understandable why only delayed data is provided, as most financial data providers charge much higher fees for the information in real-time, if it is possible to receive at all.
Websites that manage to combine the two issues of inaccurate data and delayed quotes are really doing a large disservice to any web-surfing potential investor that comes to their website looking for financial information.
Luckily, there is an answer to all of the aforementioned problems. It is as simple as typing www.otcmarkets.com. OTC Markets lists stock quotations for OTC stocks in only one fashion; in real time and with L2’s from all market makers.
While many in the investment space may think that OTC Markets is new, the Company’s history shows that nothing could be further from the truth. Starting as “The National Quotations Bureau” in the early 1900’s,the foundation of the Company has been operating for nearly 100 years in the investment and market information arena and has an extensive background in leading pioneer efforts to provide data to the investment community. It was ten years ago that the Company introduced itself as “Pink Sheets LLC” and really began using the power of the internet to satisfy investor’s needs with its premier software and data technologies with another name change to “Pink OTC Markets, Inc.” happening in 2008. This coming January, the “Pink” portion of the name will be dropped and the Company will operate simply by the name “OTC Markets.”
OTC Markets has not only listened to the frustrations of the investors with regards to incorrect data, but also has been forward-thinking in design and no longer even lists quotations in a delayed fashion. They, too, understand that it makes no sense and really does not require any further discussion because if the data can be provided in real-time, then, quite simply, it should be. As far as ticker symbols, no extensions are needed.
In many ways, OTC Markets going through name changes are somewhat symbolic of the natural progression that the Company has been exhibiting throughout its history. As the founding father of the Electronic Quotation Service, a leading-edge, internet-based real-time quotation service for OTC equities and bonds, in the late 1990’s, OTC markets has been cleaning up and adding structure to the Over the Counter markets for decades. This is evident through the Company’s latest efforts of a tier system to qualify companies listed on the OTC market to different levels, much like the NASDAQ does, to provide greater transparency to investors and elevate deserving companies to higher recognition levels that can be easily discerned by even novice investors. This, coupled with significant progressions in the way that data is provided to investors in a user-friendly and accurate manner to eliminate unnecessary headache, is making OTC Markets the site of choice for investors of all levels today.
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