What is the 'Stock Market'?

-The "Stock Market" is a term used to describe the mechanism that enables the trading of company stocks. The market is made up of several 'Stock Exchanges' such as the NYSE, Nasdaq, Amex, and OTCBB. A stock exchange is where buyers and sellers come together to exchange their stocks.

When is the stock market open?

The stock market is normally open Monday-Friday from 9:30am-4:00pm eastern time. There are extended hours in the morning and afternoon, but these don't apply to penny stocks trading on the OTCBB or Pinksheets. Most holidays result in closed, or "half" days.

What is 'Stock'?

-Stock is a financial device that companies use to allow people to buy a portion of ownership in that company. A 'share' of stock is one unit of a set number of equal portions of the company. Companies sell 'Shares' of stock to raise money for various types of business development.

What is a 'Stock Broker'?

-A Broker is essentially a middle-man that acts between buyers and sellers of 'securities'. The stock broker acts to initiate and complete the transaction between individual buyers, institutions, and 'Market Makers'. To act as a broker for securities such as stock, a license is required. Check out the next page to find out how to get your own broker.

What is a 'Market Maker'?

-A 'Market Maker', or MM for short, is a brokerage or bank that is supposed to create an orderly market for a stock. Market makers create a market by maintaining a 'bid' and 'ask' price on each stock they are participating in. The market maker should readily buy or sell the stock when their quoted prices have been met by another party. Market makers are critical to creating 'liquidity' and efficient trading for each security they participate.

Can I see what 'Market Makers' are doing?

-To see the bid and ask prices that market makers are providing for a specific stock, you need a Level 2 (Level II, L2) quote. Level 2 quotes show each market maker participating in a stock, their current bid and ask, and the 'size' of their bid/ask. Understanding and interpreting Level 2 quotes is critical to improving your penny stock trading performance. Check out the links below for more information.

• Introduction to Level II quotes
  
  
• Level II quote service providers:
  
  AlphaTrade - Capable and affordable streaming Level II platform
  Bloomfield Investment Club - Affordable streaming Level II quotes
  • Free real time level I quotes
  • Pink Sheet Level II for $23.99/mo
  • Pink + OTCBB/Nasdaq for $43.99/mo
  Microcap Feed - Real time streamer geared for OTCBB/Pinksheets
  QuoteTracker - Streaming real time Level II, news, charts
  QuoteStream - Streaming real time Level II, news, charts
  
  
• Free Level II Quotes:
  
  Allstocks.com - Free delayed Level II quotes.