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What You Need to Know About the Upcoming OTC Delistings

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Written by Timothy Sykes
Updated 9/28/2021 6 min read
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What You Need to Know About the Upcoming OTC Delistings: Key Takeaways

  • Amendments to SEC rule 15c2-11 go into effect on September 28.
  • There’s a simple zen-like mindset that can help you navigate the OTC obstacle course…
  • Why you shouldn’t stress about any of this. (In fact, my students stressing about it riles me more than the actual rule.)

Why Jenny Isn’t Worried About the New Rules

I’m getting a ton of questions about the SEC rule going into effect on September 28. The SEC cracked down on a bunch of OTC “Pink No Information” companies as a way to protect investors…

My Take On the Upcoming OTC Delistings

top penny stocks list September 07, 2021 trading mentor Q&A Tim Sykes infinity pool Dubai 2021 trip
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A lot of OTCs have been scrambling to get current. It’s pretty crazy what lengths they’ll go to, all to appear legit. But it shouldn’t be a surprise.

Remember, these are some of the sketchiest stocks in the entire market. Many are shell companies. Very few have products or meaningful revenue. Most aren’t up to date with filings.

In this video, you’ll find…

  • Why you shouldn’t freak out, no matter what your broker says about which stocks you can or can’t trade after September 28. (I use these brokers.)
  • Common misconceptions about a bear market that apply to the current situation.
  • Why ‘in-the-know’ promoters are just as ignorant as misinformed newbies. 
  • How to cut through all the BS and spend your time on what really matters in trading.

What to Do If You Can’t Trade a Ticker

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So, what should you do if you can’t trade some tickers after September 28?

The simple answer nobody wants to hear is…

Don’t trade them.

It’s as simple as that. If you can’t trade them, you can’t trade them. There’s NOTHING you can do to change it. Expect the worst out of every company, all the time. I can’t stress this enough.

Be cynical.

99% of penny stock companies fail in the long run. Or they survive because they change company name, ticker, and industry. And they dilute shareholders. They’re ALL junk!

Here’s another question I’m getting…

Would You Change Brokers to Trade a Stock?

If a broker allows a stock, but my broker doesn’t … maybe I’ll go to another broker. But I’m not even thinking about it except to answer the question.

I have no idea how this is gonna play out. Anyone saying they ‘know’ on social media is full of BS. Don’t trust any company or anyone saying, “This company has all the proper filings and is gonna be OK. Buy the dip.” 

They’re lying. They know NOTHING.  

Expect the worst at all times. Expect every penny stock to get delisted. Expect a bear market tomorrow and the whole thing to crash.

But THIS Company Deserves to Be Traded!

Shut up. That’s a waste of time and opportunity. Spend your time studying.

You can’t predict the unpredictable and you can’t trade the untradeable.

So, what should you do?

  • Trade your patterns. The stock market isn’t going anywhere.
  • Focus on what works for you. No single stock or trade will make you rich.
  • React instead of predict. This might be the number one piece of advice I could ever teach you.

What am I going to do? I won’t change a thing. For me, predicting earnings, delistings, or market conditions — it’s a waste of time. It doesn’t matter.

If a stock gets delisted, and I can’t trade it … I won’t trade it.

Do You Have to Know Everything to Be a Successful Trader?

most active penny stocks timothy
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Putting it bluntly, no.

You think that to be successful you need to know everything. Stop spending your time trying to predict the unpredictable. You shouldn’t worry about something you can’t change.

Rules come and go — your job is to adapt.

I trade based on what I do know. (These are my rules.) Not based on what I don’t know. If it’s not something I already know, I have no comment and no opinion.

Tools & Education

Focus on studying. And for the love of all that is good … use the right tools!

StocksToTrade Breaking News

Use StocksToTrade Breaking News.* I use it every day — it’s the single most important tool in my arsenal right now. If there’s anything to know about the delistings, that’s where I’ll get the information.

Trading Challenge

If you want webinars, video lessons, DVDs, and chat … apply for the Trading Challenge. That’s where I do student Q&A — so you don’t have to worry about things like this in the future.

What do you think of the new SEC rules? Comment below with “I will react instead of predict.” I love to hear from all my readers, so comment below.

Disclaimer

*Tim Sykes has a minority ownership stake in StocksToTrade.com.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”