Over-The-Counter (OTC) Securities

What is an OTC security?

An OTC (Over-the-Counter) security is a financial security that is traded directly between parties, rather than on a centralized exchange like the NYSE or NASDAQ. OTC trading occurs via a decentralized network of dealers or brokers. These securities are not listed on major stock exchanges for various reasons, such as not meeting listing requirements or opting for fewer regulations.

What OTC securities are available for trading?

Webull currently supports trading in 450 OTC securities. To view available symbols to trade, please click here. This list is subject to change without prior notice.

What types of orders are supported for OTC trading?

Only limit day orders are supported. These stocks are non-marginable and can only be traded during regular U.S. market hours. Additionally, Webull does not support short sales for OTC stocks.

What market data is available for OTC trading?

Webull provides OTC Markets Level 1 data from OTC Markets Group. Subscribers to OTC Markets Level 1 can access:

• Tick-by-tick transactions

• Real-time best bid and offer pricing for OTCQX, OTCQB, and Pink securities.

Potential Risks Associated with Trading OTC Securities:

Risk of Low Liquidity: Low priced securities may trade infrequently, which means that it may be difficult to sell the shares once you own them. Because it may be difficult to find quotations for certain low-priced securities, they may be difficult, or even impossible, to accurately price.

Risk of Higher Volatility: Due to low liquidity, low priced securities are subject to greater volatility and price swings. A customer order to purchase or sell a low-priced security may not execute or may execute at a substantially different price that was quoted in the market at the time the order was placed. In addition, the market price of any low-priced security you purchased can vary significantly over time.

Risk of Lack of Public Information: Most large, publicly-traded companies file periodic reports with securities regulators that provide information relating to the company’s assets, liabilities and performance over time. In contrast, information about low priced securities can be extremely difficult to find, making them more likely to be the subject of an investment fraud scheme and making it less likely that quoted prices in the market will be based on full and complete information about the company.

Risk of Scams: Low priced securities are frequent vehicles for scams and/or market manipulation due to their generally lower prices and less stringent listing requirements. You should be wary of advertisements, unsolicited emails, newsletters, blogs or other promotional reports that emphasize the potential for large profits in these securities. These promotional materials are often used to manipulate or “pump up” the price of low priced securities before selling a large volume of shares, a.k.a “dump”. Customers are therefore

strongly encouraged to do their own due diligence with respect to any low priced securities they invest in and not rely on any outside promotional materials.