Penny stock investors are finding themselves looking closer at Vista Gold Corp. (:VGZ)’s shares due to the fact that the stock’s price shifted 2.12%, reaching a price level of $0.68 after the conclusion of the recent trading day.
Vista Gold Corp.’s performance this year to date is -28.42%. The stock has performed -4.97% over the last seven days, -7.54% over the last thirty, and -13.39% over the last three months. Over the last six months, Vista Gold Corp.’s stock has been -26.82% and -22.01% for the year.
Technical analysts have little regard for the value of a company. They use historic price data to observe stock price patterns to predict the direction of that price going forward. Analysts use common formulas and ratios to accomplish this.
Vista Gold Corp. (:VGZ)’s RSI (Relative Strength Index) is 41.38. RSI is a technical indicator of price momentum, comparing the size of recent gains to the size of recent losses and establishes oversold and overbought positions.
The stock stands -8.83% away from its 50-day simple moving average and also -23.14% away from the 200-day average. Recently, the commodity stands -44.82% away from the 52-week high and 8.60% from the 52-week low. The RSI (Relative Strength Index), an indicator that shows price strength by comparing upward and downward close-to-close movements is 41.38.
The OTC Markets Group operates the most well-known networks, networks such as the Pink Open Market, the OTCQB Venture Market and the OTCQX Best Market. These markets are known for including unlisted stocks that trade on the Over the Counter Bulletin Board (OTCBB). Though Nasdaq operates as a dealer network, their stocks are not classified as OTC due to the fact that they are considered to be a stock exchange. Alternatively, OTCBB stocks are usually penny stocks or are stocks offered by companies with a poor credit history.
Stocks are traded over-the-counter because the company is very small and usually cannot meet the requirements of listing exchanges. Also called “unlisted stock”, these commodities are traded by broker-dealers who negotiate directly with one another, with the dealers acting as market setters, and the OTC Bulletin Board acts as an inter-dealer quotation system, providing trading information.
Because an underlying company does not wish to meet the stringent exchange requirements, American depository receipts (representing foreign shares), are often traded over-the-counter. Also, bonds do not trade on a formal exchange market and are considered to be OTC securities.
An over-the-counter (OTC) security is one which is traded in somewhere outside the traditional, formal exchanges such as the Toronto Stock Exchange, the New York Stock (NYSE), or the NYSE MKT (formerly known as the American Stock Exchange). The phrase “over-the-counter” is used to refer to stocks that trade through a dealer network as opposed to a trade on a centralized exchange. OTC also refers to debt securities and other financial instruments which are traded through a dealer network.
Many investors find little practical difference between the OTC and the major exchanges, due to improvements in electronic quotation and trading which have facilitated higher liquidity and more quality information, though there are stark differences between the two transaction mediums. On a traditional exchange market, all buyers and all sellers are exposed to offers by all other parties, which is not always the case with dealer networks. Less transparency and less stringent regulation on these exchanges cause unsophisticated investors to take on additional risks.
Disclaimer: The views, opinions, and information expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company stakeholders, financial professionals, or analysts. Examples of analysis performed within this article are only examples. They should not be utilized to make stock portfolio or financial decisions as they are based only on limited and open source information. Assumptions made within the analysis are not reflective of the position of any analysts or financial professionals.