Adapting to Regulatory Changes in OTC Trading

The podcast discusses significant changes in the OTC market, particularly due to increased regulations that began around 2021. Many stocks that were previously traded went away as companies failed to meet mandatory reporting requirements, effectively shrinking the available pool of stocks. As a result, the trader mentions that the nature of liquidity has also changed, as the number of trades has dramatically decreased while volume may remain high, highlighting discrepancies in market activity. This shift poses challenges for traders who have relied on a more lenient regulatory environment and prompts a reevaluation of strategies and exit points.