One Step Ahead

[Bo14172]

Jim, thanks. 22 years in investing, but only
1 1/2 years looking at pennys and under <$5 stuff. I did some quick research after reading your post and learned something new today.

What broker/dealers have to go through to quote a pinksheet stock is quite a lot. But what you said in your post is right on.

According to SEC rule 15c2-11, if they don't file Form 211, they have many hoops to jump through to qualify for the exception and thus be able to quote pinksheet stocks. One of the exceptions is:

"The brokerage firm wishes to submit an unsolicited quote. An unsolicited quote represents a customer order and NOT A MARKET MAKER'S OWN POSITION and must be removed from the system once the customer order is executed."

The "not a market maker's own position" was the part that struck me.

Now I know what the "u" means. I honestly never knew before when seeing L2. : )

That doesn't mean they don't manipulate it to let their "customers" buy in low (meaning, it's their shares but have partnered with someone to buy it for them). But it does mean even if that does goes on, they are playing it long because the public cannot short pinksheets.

Good info, thanks.

Bo