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Stake Academy - OTC Stocks

The Grayscale Bitcoin ETF, Tencent and Porsche are just a few names now available as part of Stake's OTC offering. Find out more on how these non-exchange listed stocks work and how to get access.

What are OTC stocks?

Packed with multi-billion dollar global companies like Adidas and Nintendo, over the counter (OTC) stocks bypass the major US exchanges. Now, they are available to the Stake community. 

Before going into the nitty-gritty mechanics of the stocks, how broad is the OTC offering? Stake has close to 100 new OTC stocks on the platform. Here’s the full list:

#Security

Name

GBTC

Grayscale Bitcoin Trust

ETHE

Grayscale Ethereum Trust (ETH)

NLST

Netlist Inc

RHHBY

Roche Holding Ltd Sponsored ADRs

LWLG

Lightwave Logic Inc.

ALPP

Alpine 4 Technologies Ltd. Class A

DANOY

Danone SA ADRs

ETCG

Grayscale Ethereum Classic Trust

BNPQY

BNP Paribas SA Sponsored ADRs

NGLOY

Anglo American plc Sponsored ADRs

TSCDY

TESCO PLC S/ADR NEW

IMPUY

Impala Platinum Holdings Limited Sponsored ADRs

DTEGY

Deutsche Telekom AG Sponsored ADRs

KGFHY

Kingfisher Plc Sponsored ADRs

AKZOY

Akzo Nobel N.V. Sponsored ADRs

AXAHY

AXA SA Sponsored ADRs

BASFY

BASF SE Sponsored ADRs

IMBBY

Imperial Brands PLC Sponsored ADRs

JBSAY

JBS S.A. Sponsored ADRs

IFNNY

Infineon Technologies AG Sponsored ADRs

GDLC

Grayscale Digital Large Cap Fund LLC

EXPGY

Experian PLC Sponsored ADRs

BCHG

Grayscale Bitcoin Cash Trust BCH

ADRNY

Royal Ahold Delhaize N.V. Sponsored ADRs

ZURVY

Zurich Insurance Group Ltd Sponsored ADRs

WMMVY

Wal-Mart de Mexico SAB de CV Sponsored ADRs Class V

ADDYY

adidas AG Sponsored ADRs

DLAKY

Deutsche Lufthansa AG Sponsored ADRs

NHYDY

Norsk Hydro ASA Sponsored ADRs

REPYY

Repsol SA Sponsored ADRs

FSUGY

Fortescue Metals Group Ltd Sponsored ADRs

JSAIY

J Sainsbury Plc Sponsored ADRs

RDSMY

Koninklijke DSM N.V. Sponsored ADRs

LTCN

Grayscale Litecoin TR LTC

HEINY

Heineken NV Sponsored ADRs

TCEHY

Tencent Holdings Ltd. Unsponsored ADRs

LVMUY

LVMH Moet Hennessy Louis Vuitton SE Unsponsored ADRs

CICHY

China Construction Bank Corporation Unsponsored ADRs Class H

PROSY

Prosus Nv Sponsored ADRs

AAGIY

AIA Group Limited Sponsored ADRs

SIEGY

Siemens AG Sponsored ADRs

SFTBY

Softbank Grp Unsp/Adrs

IDEXY

Industria de Diseno Textil Inditex SA Unsp/Adrs

EADSY

Airbus SE Unsponsored ADRs

ALIZY

Allianz Se Unsp/Adrs

NTTYY

Nippon Telegraph and Telephone Corporation Sponsored ADRs

VWAGY

Volkswagen AG Unsponsored ADRs

ENLAY

Enel SpA Unsponsored ADRs

NPSNY

Naspers Limited Sponsored ADRs Class N

SBGSY

Schneider Elec Unsp/Adrs

RCRUY

Recruit Holdings Co Adrs

IBDRY

Iberdrola SA Sponsored ADRs

NTDOY

NINTENDO CO LTD Unsponsored ADRs

ADYEY

Adyen N.V Unponsored ADRs

PNGAY

Ping An Insurance (Group) Company of China Ltd. Sponsored ADRs Class H

KDDIY

Kddi Corp Unsp/Adrs

SHECY

Shin-Etsu Chem Unsp/Adrs

RBGLY

Reckitt Benckiser Group plc Sponsored ADRs

BAYRY

Bayer AG Sponsored ADRs

GLNCY

Glencore Plc Unsp/Adrs

LNSTY

London Stock Exchange Group plc Sponsored ADRs

DKILY

Daikin Industries Ltd Unsp/Adrs

ISNPY

Intesa Sanpaolo S.p.A. Sponsored ADRs

LZAGY

Lonza Group Ag Unsp/Adrs

FANUY

Fanuc Corporation Unsponsored ADRs

NRDBY

Nordea Bank Abp Sponsored ADRs

CMPGY

Compass Group Plc Sponsored ADRs

VWDRY

Vestas Wind Sys Unsp/Adrs

ENGIY

ENGIE SA Sponsored ADRs

DBOEY

Deutsche Boerse AG Unsponsored ADRs

CLPBY

Coloplast A/S Sponsored ADRs

BYDDY

BYD Company Limited Unsponsored ADRs

CTTAY

Continental AG Sponsored ADRs

CKHUY

CK Hutchison Holdings Unsp/Adrs

BACHY

Bank of China Limited Unsponsored ADRs Class H

KAOOY

Kao Corp Unsp/Adrs

PCRFY

Panasonic Corp S/Adrs

LGRDY

Legrand Sa Unsp/Adrs

MGDDY

Michelin Cie Gen Unsp/Adrs

AMKBY

A.P Moller-Mrs Uns/Adrs

UNCRY

Unicredito Spa Unsp/Adrs

SCGLY

Societe Generale S.A. Sponsored ADRs

KMTUY

Komatsu Ltd. Sponsored ADRs

BAESY

BAE Systems plc Sponsored ADRs

SVNLY

Svenska Handelsbanken AB Uns/Adrs

NSANY

Nissan Motor Co Ltd Sponsored ADRs

BDORY

Banco do Brasil S.A. Sponsored ADRs

KNRRY

Knorr-Bremse Unsp/Adrs

POAHY

Porsche Autombl Unsp/Adrs

KKPNY

Royal KPN NV Sponsored ADRs

ICAGY

International Consolidated Airlines Group SA Sponsored ADRs

UBSFY

Ubisoft Entertainment SA Unsponsored ADRs

AUOTY

Au Optronics Corp Adrs

LRENY

Lojas Renner SA Sponsored ADRs

CFRUY

Compagnie Financière Richemont SA Un/Adrs

WNDW

Solarwindow Tech Inc

Going deeper

Two major questions arise surrounding OTC stocks.

The obvious question. Without an exchange, how do these shares change hands? Such shares are traded through broker-dealer networks. Using an electronic network, scores of broker-dealers are posting stocks on offer. Trades are executed directly between the buyer and seller without the need for a 3rd party exchange to settle transactions.

A company called OTC Group runs such networks. Three marketplaces exist. Each OTC stock belongs to one of the following categories.

Best Market (OTCQX): The most stringent report requirements, such companies are generally multi-billion-dollar foreign companies that may have plans to eventually list on US markets. The majority of OTC stocks fall into the OTCQX category on Stake despite the fact only 4% of OTC stocks are in this tier. Stocks under US$5 in price are also ineligible for OTCQX trading.

Venture Market (OTCQB): The middle tier, these companies tend to be early-stage or developing.

Pink Sheets: Such companies have no US reporting requirements and don’t have to report to the SEC. While pink sheets may have a bad image, big names like Nintendo fit into the category. While the US regulators may not monitor such stocks, foreign regulators may. Stake only offers access to the highest quality pink sheet stock.

Why OTC?

Next, why would a company go OTC rather than on an exchange? In short, listing on an exchange is difficult and costly. For smaller companies, the millions needed to both list then comply with the yearly SEC and FINRA audits prices them out of the major exchanges. 

For bigger companies, like the OTC stocks found on Stake, they are generally foreign ADRs. These companies are already listed on a local market and an OTC listing provides an easier option for foreign investors to access the stock. Or in the case of the Greyscale crypto ETFs, the SEC is yet to approve an ETF with crypto as the underlying asset. Such instruments make use of the OTC markets to avoid the SEC’s regulatory conditions.

A few things to consider

It’s important to recognise that OTC stocks tend to have lower liquidity. Entering and exiting positions may be more difficult if traders are looking to execute at specific prices. Lower liquidity is also associated with increased volatility.

Pay careful attention when placing orders to ensure you execute at your desired price. Read our Stake Academy on Order Types to understand how to best leverage market, limit and stop orders to execute trades.

Moreover, while the stocks available on Stake are high-quality OTC stocks, generally such stocks are subject to less regulation than their exchange-listed counterparts. Naturally, this leads to more risk.

How do I trade OTC stocks?

From January 12, 2022, OTC stocks are exclusively available to Stake Black Members only. Per fair terms of use agreement, Stake Black members can make up to 10 OTC trades per month with $0 brokerage. Stake Black gives users access to not only OTC stocks but analyst ratings, full company financials and instant buying power. For just US$9 per month or US$7.50 billed annually, upgrade to Stake Black in your account profile page. View OTC Disclaimers here.


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