Advantages:
Pink sheet stocks are frequently inexpensive: many of them trade for less than $5. Some are available for less than a dollar, making them very affordable.
A chance to profit from growth: Emerging companies are sometimes traded on the pink sheets first for low prices. As the companies grow, early investors can capitalize. Some progress to trading on major exchanges.
Disadvantages:
Limited information: These stocks are difficult to evaluate because they are not required to file financial information.
According to the SEC, they are high risk because they are highly illiquid. They are frequently the targets of stock manipulation schemes. Trading these stocks has a poor track record if the stock has lax disclosure requirements or was the subject of a promotional campaign.
High volatility: Because of the nature of over-the-counter trading, returns can be extremely volatile.

Pink sheet stocks are over-the-counter (OTC) stocks not listed on major exchanges like the NYSE or NASDAQ. They offer both advantages and disadvantages.

Advantages:
- Low cost: These stocks are often priced cheaply, attracting investors seeking high potential returns.
- Access to smaller companies: Investors can buy shares in early-stage or smaller companies with growth potential.
- Less regulation: Fewer regulations can mean quicker, more flexible trades.

Disadvantages:
- High risk: Due to limited regulation, pink sheet stocks are riskier, with a higher potential for fraud or misleading information.
- Low liquidity: These stocks can be harder to sell quickly, leading to price volatility.
- Lack of transparency: Companies listed may not be required to disclose financial details, making informed investing difficult.