28th Jul 2009
Buying Penny Stocks
If you know anything about stock investing and have done any research on your own, you may have run across a type of stock called Penny stocks. A penny stock is a stock that usually costs pennies, hence the name. Some Penny stocks costs a dollar or more, never more than five dollars, but generally they start pennies.
Penny stocks are also not traded on any major exchange, they are traded OTC which means over the counter. You will not see corporations like Apple or Google traded as penny stocks because these are large corporations traded on large legitimate exchanges.
The price of the stock is what categorizes it as a penny stock, regardless of the market capitalization. If the stock is a small company that trades OTC and trades at less than five dollars, it is most likely considered a penny stock.
Should You Buy Penny Stocks?
Penny stocks are very risky type of stock and are considered speculative. Some people love to trade penny stocks because of the potential amount of money they can make. Yes, it is very possible to make a huge amount of money, but it is even more likely that you’ll lose money.
Penny stocks are very risky and I would never recommend investing in them. Unless you have a very strong knowledge of the Corporation and feel very confident in them, you shouldn’t deal with penny stocks.
If you do decide to trade penny stocks, you’ll probably need to open up an account with a brokerage firm that deals with these OTC stocks. This is necessary to make sure you are able to purchase them because not all firms support every exchange.
If you do decide to invest in this type of stock, at least stay diversified. Invest a little bit in penny stocks but invest most of your money and more stable corporations and bonds. This will help minimize your losses.
If you know anything about stock investing and have done any research on your own, you may have run across a type of stock called Penny stocks. A penny stock is a stock that usually costs pennies, hence the name. Some Penny stocks costs a dollar or more, never more than five dollars, but generally they start pennies.
Penny stocks are also not traded on any major exchange, they are traded OTC which means over the counter. You will not see corporations like Apple or Google traded as penny stocks because these are large corporations traded on large legitimate exchanges.
The price of the stock is what categorizes it as a penny stock, regardless of the market capitalization. If the stock is a small company that trades OTC and trades at less than five dollars, it is most likely considered a penny stock.
Should You Buy Penny Stocks?
Penny stocks are very risky type of stock and are considered speculative. Some people love to trade penny stocks because of the potential amount of money they can make. Yes, it is very possible to make a huge amount of money, but it is even more likely that you’ll lose money.
Penny stocks are very risky and I would never recommend investing in them. Unless you have a very strong knowledge of the Corporation and feel very confident in them, you shouldn’t deal with penny stocks.
If you do decide to trade penny stocks, you’ll probably need to open up an account with a brokerage firm that deals with these OTC stocks. This is necessary to make sure you are able to purchase them because not all firms support every exchange.
If you do decide to invest in this type of stock, at least stay diversified. Invest a little bit in penny stocks but invest most of your money and more stable corporations and bonds. This will help minimize your losses.
Posted by garis2929b under 
penny stocks 
Comments Off