How do pink sheets work?
If you are an investor who wants to trade on pink sheets, you must contact a brokerage firm to act as the agent between you and the market maker in pink sheets. The stockbroker will get quotes from the electronic data market system and will enter the details online. The order will then be sent to the trader, either by computer or telephone. If the trader is also the market maker for the specific stock ordered, then he will execute the order. If he is not the direct market maker, he will forward it to the market maker who is offering the best price for the security in subject, who will in turn execute the order. After this process, a transaction report will be sent to the stockbroker, which he will relay to the investor through a transaction confirmation.
