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Hi friends,
I got a statement from Ameritrade regarding the pink sheet trading. How do you think?
"All trades for pink sheet securities involve a Market Maker. Unlike listed or NASDAQ securities, securities that are quoted on the pink sheets require that you always buy from the market maker on the ASK side and always sell to the market maker on the BID side. Because you always buy on the ASK side, a pink sheet security can trade at or below your buy limit and not trigger an execution of your order. Conversely, because the BID must rise to your sell limit price, a pink sheet stock can trade at or above your sell limit and not execute your order. The only way to tell if you are due a fill is if your price was reached by the ask on buy orders or the bid on sell orders. For this reason, you can see trades above and below your price and not be due a fill. In addition, as you should be aware when you are trading pink sheet securities, "match" trades do not occur and there are no rules of reflection. This means that you can be "traded through" and still not be due a fill as you would be on a listed or NASDAQ security."
Thanks, and cheers
Micky
I got a statement from Ameritrade regarding the pink sheet trading. How do you think?
"All trades for pink sheet securities involve a Market Maker. Unlike listed or NASDAQ securities, securities that are quoted on the pink sheets require that you always buy from the market maker on the ASK side and always sell to the market maker on the BID side. Because you always buy on the ASK side, a pink sheet security can trade at or below your buy limit and not trigger an execution of your order. Conversely, because the BID must rise to your sell limit price, a pink sheet stock can trade at or above your sell limit and not execute your order. The only way to tell if you are due a fill is if your price was reached by the ask on buy orders or the bid on sell orders. For this reason, you can see trades above and below your price and not be due a fill. In addition, as you should be aware when you are trading pink sheet securities, "match" trades do not occur and there are no rules of reflection. This means that you can be "traded through" and still not be due a fill as you would be on a listed or NASDAQ security."
Thanks, and cheers
Micky