2007-02-23 11:45:13 · 8 answers · asked by jarynth2 2 in Business & Finance ➔ Investing
Interesting site, Tim P. I'm also into covered calls. Do you usually cover in, at or out of the money?
2007-02-23 23:49:22 · update #1
Two reasons: (1) low volumes of normal trading, and (2) Securities and Exchange Commission.
Pink sheets, bulletin board stocks don't sell a lot so a good ad program can apply a little extra volume that would translate to a pile of price change. The promoters get a piece in first, send out the spam, and when the stock spurts upward--well if folks are buying, somebody has to do the selling, especially if you are paying a comparative premium price. They are doing you a service, right? That is what is meant when you hear someone speak of "pump and dump".
The Securities and Exchange Commission (SEC) enforces reporting and trading practices for stocks of companies listed on stock exchanges. The pink sheet and bulletin board companies are such miniscule and fringe business they don't usually bother with them. The US Postal Service enforces more legal violations against market manipulators than the SEC (postal fraud gets an amazing number of people behind bars).
2007-02-23 14:15:53 · answer #1 · answered by Rabbit 7 · 0⤊ 0⤋
OTC stocks can be manipulated with a very small amount of cash.
Pump and dump scams induce an investor to but a cheap OTC stock while the firm owns the majority shares.
Once the shares run up in price, the firm controls the exit prices making sells next to impossible to get out.
Remeber it's not hard to get in, but it is hard to sometimes get out of thinly traded inexpensive stocks
2007-02-23 11:55:11 · answer #2 · answered by Allen W 1 · 0⤊ 0⤋
Hey there,
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Bye Bye
2014-09-22 09:56:21 · answer #3 · answered by Anonymous · 0⤊ 0⤋
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2016-02-15 21:39:23 · answer #4 · answered by ? 3 · 0⤊ 0⤋
Easier to manipulate the prices for the thinly traded OTC stocks.
2007-02-23 11:50:34 · answer #5 · answered by Tim P 2 · 0⤊ 0⤋
Because those companies aren't real.
I strongly suggest you to buy all the seasons of "The Sopranos" on Blu-Ray or HD-DVD and watch all the episodes.
2007-02-24 07:36:18 · answer #6 · answered by Anonymous · 0⤊ 1⤋