Over The Counter Bulletin Board stocks (OTCBB) and the Pink Sheets are the two types of penny stocks you will encounter. The main difference between the two is that OTCBB stocks are required to file with the SEC and the pink sheet stocks are not. Some traders refuse to trade pink sheets because of this, those traders are missing out on some great opportunities. Even Warren Buffet has been known to look for undervalued companies in these markets.

Beware, trading in the OTCBB and Pink Sheets is not for everyone. Often the stocks are illiquid and have a large spread between bid and ask. There are also a lot of companies that are completely worthless and will try and masquerade as great companies while diluting their shares. Another worry about these stocks is the fraud involved or