To: TheLineMan who wrote (17041 ) 7/11/1998 3:31:00 AM From: paulmcg0 Respond to of 50264
Val -- all this talk of how OTC Bulletin Board market makers get rich has given me an idea. You've mentioned that you look for stocks that are being heavily hyped and either ride it up (like you did with DGIV) or short as they are going down. So, here's a few ideas on how to expand upon your ideas, with OTCBB stocks: (1) Look at the list of most active OTCBB stocks at otcbb.com . Unfortunately, these stocks are sorted by share volume, but you want to pick the stocks with the highest average daily dollar volume, because that's where the most money to be made is. (2) Cross-reference those OTCBB stocks against the number of messages and amount of hype here on SI. Pay particular attention to non-filing companies and companies with grandiose claims being made for them. (3) If the stock is going up, buy it, but put a stop order in with your broker to automatically dump the stock if it falls 10-20% from its peak. (With electronic brokerages you can adjust your stop orders online as the price goes up.) (4) After the stock starts to come down, say 10-20% below its peak, but is still above 5 dollars a share, short it until it hits bottom. Maybe you'll hit the jackpot, and the SEC will halt trading in the stock you've shorted. Most people don't know the following information, provided by the OTCBB: "The OTCBB is a quotation service for securities which are not listed or traded on Nasdaq or a national securities exchange." "What is the difference between the OTC market and a stock exchange?" "Stock exchanges have specific quantitative and qualitative listing and maintenance standards which are stringently monitored and enforced. Companies listed on an exchange have reporting obligations to the exchange and a direct business relationship exists between the exchange and its listed companies. The OTC market consists of unlisted securities. Issuers of these securities often have no reporting obligations to any federal regulatory authority [Comment: unless they have more than 300 shareholders, like DGIV does]. There are no minimum required standards." Paul M.