The Rise Of Penny Stock And OTC Trading In America | Exploring Markets

The Rise Of Penny Stock And OTC Trading In America

The stock market's major indexes, the S&P 500 and Dow Jones Industrial Average, are hitting new all-time highs this year. It's a special milestone for our American economy and its recovery.

There is one thing happening beneath the surface, however, that should also be noted. It is on the topic of penny stocks and OTC stocks.

If you did not know, the average value of monthly trades on OTC exchanges is also at an all-time high. It just touched $23.5 billion. OTC exchanges are home to some of biggest scams around. There are a slew of speculative penny stocks listed on the exchange.

What exactly does this mean?

It could mean that risk taking is at an all-time high. Or that retail traders are jumping in these stocks by way of Internet advertising and marketing. Or, it could simply mean that Wall Street has taken their high frequency trading machine to the OTC market.

Here's a chart from the WSJ showing the rise of the OTC: