![]() What is a large-cap stock? We thought you’d never ask. For this reason, Facebook would be considered a large-cap stock. Facebook (NASDAQ:FB), for comparison, has a market capitalization of $733.62 billion. If that still sounds like a lot of money, it is, depending on who or what you’re comparing it to. Generally speaking, to be considered a micro-cap stock, a company must have a market capitalization of under $300 million. Some OTC systems require companies on their platform to meet requirements, but they pale in comparison to the larger exchanges.Ī micro-cap stock is often referred to in conversation as a penny stock, and the two terms can by and large be used interchangeably with one another. The biggest risks associated with micro-cap stocks are that the companies listed don’t have to meet the strict regulatory requirements imposed by markets like the NYSE and NASDAQ.All three of these systems are regulated and monitored by FINRA (Financial Industry Regulatory Authority). DBOT ATS, Global OTC ATS, and OTC Link ATS are three of the primary OTC trading systems that investors can use to access the OTC market.OTC stands for over-the-counter, just like it does when referring to certain drugs and other pharmaceutical products.To be considered a micro-cap stock, a company generally must have a market cap of less than $300 million. Micro-cap stocks and penny stocks are terms used to refer to securities offered by companies with small (micro) market capitalizations.There’s just a few more things that investors need to know before they venture into this sub-section of the stock market. For many corporations, it’s the only way that investors can put their financial support behind the company. ![]() This isn’t to say that micro-cap and OTC stocks don’t have their place and function in the financial marketplace. And if you ask any financial advisor, they’ll likely tell you that the rich and famous lifestyle and incredible ROI that you see on the big screen are incredibly unlikely to occur in real life. The story of Jordan Belfort is, unfortunately, most people’s first and only exposure to the concept of penny, micro-cap and over-the-counter (OTC) stocks. The real Jordan Belfort wasn’t so lucky, netting a four year prison sentence for his crimes against investors. For his work, DiCaprio was nominated for a Golden Globe. ![]() The 2013 movie Wolf of Wall Street, starring Leonardo DiCaprio as Jordan Belfort, follows the life of a stockbroker who got his start trading penny stocks to investors.
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