|
Penny Stocks
|
Penny Stocks
|
Penny Stocks -
"Defined by the SEC as a security that sold for less than $5 per share and was not listed or authorized for quotation on a NASDAQ market exchange. Penny stocks are issued by companies with a short or erratic history of revenues and earnings, and therefore such stocks are more Volatile than those of large, well-established firms traded on the New York or American stock exchanges. Many brokerage houses therefore have special precautionary rules about trading in these stocks and the Securities and Exchange Commission (SEC) requires that brokers implement Suitability Rules in writing and obtain written consent from investors.
All penny stocks are traded Over-The-Counter, many of them in the local markets of Denver, Vancouver, or Salt Lake City. These markets have had a history of boom and bust, with a speculative fervor for oil, gas, and gold-mining stocks in the Denver penny stock market in the late 1970s turning to bust by the early 1980s."
(Source)
Penny stocks investments can often show you a return of 100% to a 1000% gain, or even greater.
These gains can be generated quickly, sometimes a few days, or sometimes even hours!
Unlike other investment oportunities, which have to be held for a long period of time.Penny stocks
give you the opportunity to make a large profit very quickly. But please be aware that as fast as you can gain that profit,
you can quickly loose your entire investment.
To find the best penny stocks you can evaluate a few aspects of the company. Learn what the company does,
how it generates revenue, etc.(do your howework). Once you are comfortable with the company analyze the folowing:
- Strong Business Plan and the results to prove it. - Check their financials filings.
- Good Trading Volume - this will make it easier to see buy and sell shares.
- Trends - If a company is doing well over the years, you should see a direct effect on the price of the stock.
Penny stocks are a great way for new investors to get their feet wet in the stock market. Penny stock allows investors to risk small amounts of money with a potential for huge reward.
|
|
|