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Reviewing Buying ‘Wholesale’ on the OTC

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We had a note from a reader today about buying new preferred issues on the Over the Counter market (OTC) prior to regular trading on the NYSE or NASDAQ. In the case of reader Ray his problem is more about getting a order entered with his brokerage firms. Ray uses both Fidelity and Vanguard.

1st off to trade a new issue on the OTC market one needs the OTC Temporary Ticker (a ticker assigned for a 4 or 5 day period prior to regular trading on the NYSE or NASDAQ). Ray is looking to buy the new CHS 7.50% preferred issue (temp ticker CHNPP). In this case we noted the beginning of trading on this issue on1/14/2015–here. We also try to post all the known information on the ‘New Issue’ page. Lastly we post the information on the issue detail page.

Once you have your ticker you are ready to go. We use both eTrade and Fidelity and have hadno issues placing orders on the OTC with either of these brokers.

Now we have been told by readers that they can’t buy OTC with Interactive Brokers accounts–but beyond that we can only say that both eTrade and Fidelity are just fine.

Now rather than going over every last detail of the trade we simply will link to our page‘Revisiting Buying Preferred Stocks Wholesale on the OTC Grey Market’ where we outline the trade step by step in great detail.

Always remember that one can go ahead and phone their brokerage firm and find out for sure if they can purchase OTC with the firm.

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