Author Topic: Best Broker for OTC stocks - I need a recomendation  (Read 7233 times)

NoCalledStrikes

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Best Broker for OTC stocks - I need a recomendation
« on: July 30, 2018, 04:20:45 PM »
I just got a call from Merrilledge an hour ago telling me that effective August 1, I will no longer be allowed to buy stocks under $5 or under $300 million USD market cap.  They claim this is a SEC rule and no brokers will be allowed to let their customers buy micro-cap stocks ever again, but that strikes me as absurd. For starters, if no one is allowed to buy, who would we be allowed to sell our existing positions too?

This is part of a trend as For the past two years, I've had problems buying OTC stocks at Fidelity and TD Ameritrade, but no problems at Merrilledge and so have been using Merrilledge almost exclusively for legitimate (non-penny) OTC stocks.  For instance, Fidelity won't let me buy LICT which sells for $13,900/share. They apparently consider it a penny stock, so I bought it at Merrilledge.  In my experience, TD Ameritrade also refuses opening orders for most OTC stocks (in the past, they just required you to place them by phone).

Anyway, I am in need of a broker for an IRA which will let me buy OTC listed securities which market caps under $300 million.  Any suggestions?


SnarkyPuppy

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #1 on: July 30, 2018, 04:37:56 PM »
Etrade,  interactivebrokers

muscleman

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #2 on: July 30, 2018, 05:07:00 PM »
I just got a call from Merrilledge an hour ago telling me that effective August 1, I will no longer be allowed to buy stocks under $5 or under $300 million USD market cap.  They claim this is a SEC rule and no brokers will be allowed to let their customers buy micro-cap stocks ever again, but that strikes me as absurd. For starters, if no one is allowed to buy, who would we be allowed to sell our existing positions too?

This is part of a trend as For the past two years, I've had problems buying OTC stocks at Fidelity and TD Ameritrade, but no problems at Merrilledge and so have been using Merrilledge almost exclusively for legitimate (non-penny) OTC stocks.  For instance, Fidelity won't let me buy LICT which sells for $13,900/share. They apparently consider it a penny stock, so I bought it at Merrilledge.  In my experience, TD Ameritrade also refuses opening orders for most OTC stocks (in the past, they just required you to place them by phone).

Anyway, I am in need of a broker for an IRA which will let me buy OTC listed securities which market caps under $300 million.  Any suggestions?

What? This is unheard of. I switched from IB to TD Ameritrade last November and have been buying OTC stocks with no problem. Their flat fee costs much less than the per share commission in IB. Are you saying that you can't buy OTC stocks in TD Ameritrade?
Note that a few months ago IB issued an article to ban customers from buying certain otc stocks trading in the grey market.
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OracleofCarolina

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #3 on: July 30, 2018, 05:17:03 PM »
anyone know what SEC rule has the brokers acting bonkers? Mine changed earlier this year and only allows stocks trading on NYSE or NASDAQ and before that I could buy anything OTC.

NoCalledStrikes

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #4 on: July 30, 2018, 05:58:34 PM »
Muscleman - Very interesting, I just tested 4 microcaps on TD Ameritrade and they accepted my test orders for all of them.  Since I entered them after hours, I wonder if I had entered them during trading hours if they would have cancelled them as they often put my small cap orders on hold before releasing them during market hours. TD Ameritrade is often very picky with me, so I had given up trying the past 6 months or so for low liquidity stocks, but perhaps they've changed (I will test during market hours before I call this a permanent change).

I tried my Fidelity account and most of my OTC's were going through, but it wouldn't accept orders for Alpha Natural Resources (AANR and APNR) and Solitron (SODI) "Error:(TC9052) Opening transactions for Pink Sheets (without information) are not permitted because of the risks associated with these securities and all Microcap securities." But they would take LICT which they most definitely did not accept several months ago.

The brokerage rules on this are so nonsensical.  I would love to consolidate accounts, but it seems like I have to have multiple accounts if I want to be able to trade obscure stocks since there is no way of knowing who will let you trade which stock.

rkbabang

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #5 on: July 30, 2018, 06:30:26 PM »
Muscleman - Very interesting, I just tested 4 microcaps on TD Ameritrade and they accepted my test orders for all of them.  Since I entered them after hours, I wonder if I had entered them during trading hours if they would have cancelled them as they often put my small cap orders on hold before releasing them during market hours. TD Ameritrade is often very picky with me, so I had given up trying the past 6 months or so for low liquidity stocks, but perhaps they've changed (I will test during market hours before I call this a permanent change).

I tried my Fidelity account and most of my OTC's were going through, but it wouldn't accept orders for Alpha Natural Resources (AANR and APNR) and Solitron (SODI) "Error:(TC9052) Opening transactions for Pink Sheets (without information) are not permitted because of the risks associated with these securities and all Microcap securities." But they would take LICT which they most definitely did not accept several months ago.

The brokerage rules on this are so nonsensical.  I would love to consolidate accounts, but it seems like I have to have multiple accounts if I want to be able to trade obscure stocks since there is no way of knowing who will let you trade which stock.

I own a number of penny stocks in Fidelity account, but I ran into this for the first time this week trying to put an order in to buy HAUP, it gave me the same reason as above “Pink Sheets without information”.

LC

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NoCalledStrikes

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #7 on: July 30, 2018, 07:18:27 PM »
LC - I like how LICT corporation at $13,900 a share, a 30 year operating history, and nice financials posted on its web site is considered a speculative investment, buy you can buy all the Tesla you can want for your IRA with the SEC's blessing. All I want is to sign a form saying I am a big boy and won't sue if you sell me exactly what I ordered at the price I offered to buy it at.

shhughes1116

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #8 on: July 31, 2018, 05:15:34 AM »
I've used E*Trade for quite some time to buy OTC stocks.  In general, I haven't had any problems.  Every now and again, when I place an online order for a thinly traded stock or a penny stock, the online ordering platform will prompt me to call E*Trade to speak with a broker in order to complete the order.  The broker can see the order you tried to place and will complete the order for you.   In these cases, the higher fee for broker-assisted orders are waived and you pay the online fee.  Early on, they would ask a few questions - I think to make sure I wasn't crazy or an idiot.  Now, they don't ask any questions, they just confirm what I wanted to order, and then place the order for me, which I assume is the result of seeing that I have done this in the past without losing my shirt. 

NoCalledStrikes

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Re: Best Broker for OTC stocks - I need a recomendation
« Reply #9 on: July 31, 2018, 05:52:52 AM »
The new banner message from Merrill Edge today:

Effective July 31, we have updated the terms and conditions of our Online brokerage as well as the definition of low-priced securities.

Note: Open orders may be canceled for purchases of securities that do not meet the guidelines for low priced securities. This is an opening transaction that will no longer be permitted as part of the changes to our low-priced security policy. Please contact us with any questions.

Important Information Regarding Low Value Securities
Due to the risks related to low-priced securities (LPS), the Firm has special restrictions on orders in low-priced securities.

A "low-priced security" is generally defined as having any of the following traits:

Securities that trade over-the-counter (OTC) at or below $5-per-share and/or less than or equal to $300 million in market capitalization
Securities labeled as Caveat Emptor by OTC Markets Group
OTC securities that have limited or no financial disclosure information available
Purchase orders in certain securities meeting the LPS definition will not be permitted.