The pink sheets are a scary place, where you better know what you’re getting into before you dabble, with one exception–international stocks.

A little history

At one time, price quotes and the names of market makers for stocks not listed on stock exchanges were circulated to trading desks on long sheets of pink-colored paper.  That’s where the name “pink sheets” comes from.

The company that began this service in 1913, National Quotation Bureau, is now known as Pink OTC Markets and operates an interdealer quotation and trading service called Pink Quote, plus a financial web portal for small-cap OTC stocks, http://www.pinksheets.com.

Maybe there was a time when there were national stocks listed on the New York Stock Exchange, regional stocks listed on the Boston or Philadelphia or San Francisco Stock Exchanges and all the rest were tallied on the pink sheets.  If so, that was before I entered the business in 1978.  By the late Seventies, Nasdaq was well past its 1971 startup as a bulletin board and significantly down the road toward being the stock market power it is today.  So the process of pushing the toward the very smallest stocks had already begun.

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