Over the Counter Bulletin Board

The OTC Bulletin Board (OTCBB) is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (OTC) equity securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. OTCBB securities include national, regional, and foreign equity issues, warrants, units, American Depositary Receipts (ADRs), and Direct Participation Programs (DPPs).

Features
The OTCBB: provides access to more than 3,300 securities; includes more than 230 participating Market Makers; electronically transmits real-time quote, price, and volume information in domestic securities, foreign securities and ADRs; and displays indications of interest and prior-day trading activity in DPPs

Pink Sheet
A daily publication compiled by the National Quotation Bureau with bid and asks prices of over-the-counter (OTC) stocks, including the market makers who trade them. Unlike companies on a stock exchange, companies quoted on the pink sheets system do not need to meet minimum requirements or file with the SEC. Pink sheets also refers to OTC trading. The pink sheets got their name because they were actually printed on pink paper. You can tell whether a company trades on the pink sheets because the stock symbol will end in ".PK".

Third and Fourth Market

The third market comprises OTC transactions between broker-dealers and large institutions. The fourth market is made up of transactions that take place between large institutions. These don't concern individual investors because they involve significant volumes of shares to be transacted per trade. These markets deal with transactions between broker-dealers and large institutions through over-the-counter electronic networks. The main reason these third and fourth market transactions occur is to avoid placing these orders through the main exchange, which could greatly affect the price of the security. Because access to the third and fourth markets is limited, their activities have little effect on the average investor.

Third Market Trading by non-exchange-member brokers/dealers and institutional investors of exchange-listed stocks. In other words, the third market involves exchange-listed securities that are being traded over-the-counter between brokers/dealers and large institutional investors. Before selling an exchange-listed security to a non-member, a member firm must fill all limit orders on the specialist's book at the same price or higher. Typical institutional investors who take part in the third market include investment firms and pension plans. Fourth Market The trading of exchange-listed securities between institutions on a private over-thecounter computer network, rather than over a recognized exchange such as the New York Stock Exchange (NYSE) or Nasdaq. Trades between institutions will often be made in large blocks and without a broker, allowing the institutions to avoid brokerage fees. For example, when a mutual fund and a pension fund enter into a large block trade with each other, this would generally occur in the fourth market and usually over an electronic communication network. By executing the transaction this way, both parties avoid brokerage and exchange transaction fees. They also avoid the possibility of distorting the market price or the volume traded on an exchange.