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Definition: Pink Sheets
These are compilations of the “bid” and “ask” prices of several Over the counter (OTC) stocks and securities. Pink sheet also indirectly refer to the trading of OTC products. These information were printed on a pink paper and hence the name.
Presently the pink sheets are a daily publication which is compiled by the National Quotation Bureau. It is important to know that any companies with stocks in pink sheet do not need any kind of requirement/ obligation to file to Securities and Exchange Commission (SEC) quite unlike the companies trading in normal stock exchanges. This makes the reputation of Pink Sheets doubtful. When any companies are de-listed from the stock exchanges, then they trade their stocks in Pink Sheet in OTC. Thus Pink Sheet also consists of penny stocks and borderline companies. Pink sheets stock trading falls under 2 categories: 1) companies failing to meet the regulation criteria of NYSE or other American Stock exchanges and 2) companies which are not willing to do regulatory filings.