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Buy low; sell high. Bulls, bears, and pigs? Are investors discussing a farm on Wall Street. Finding unbiased and comprehensive information about the penny stock market can be challenging. Here’s a quick Penny Stock market 101. What are penny stocks? Penny stocks are microcap stocks, meaning they trade at less than $5.00 a share. Companies trading penny stock may have some challenges surrounding debt, liquidity and profits. Many of these companies were once traded on the “big boards”, of the New York Stock Exchange or the NASDQ, but have been delisted. Other companies are using their penny stock offerings to monitor investor interest in anticipation of a listing on one of the major exchanges. Where are penny stocks traded? Some penny stocks are traded on the NASDQ. These stocks may have been listed on the exchange at one time, but have been delisted. Other stocks are traded Over the Counter-Bulletin Board (OTC-BB). These stocks are not traded on a traditional exchange, but rather electronically through over the phone and on-line trading. You can also invest in penny stocks using the pink sheet service, which is a quotation service providing investors with information about stocks registered with it. Pink Sheet stocks do not have to file with the Securities and Exchange Commission (SEC). Do I need a broker to invest on penny stocks? Most investors do not use a broker or a brokerage service to trade penny stocks. They simply open an online account with any of the online trading firms and begin investing. How do I set up an online trading account? Begin by researching the trading platforms and associated fees. Once you find a system that will meet you needs and budget, you simple enroll online and fund it with an opening balance. Not all online trading services are the same. Be sure to explore any associated maintenance, transfer, or trade fees, as well as the level of customer service or investment advice available Where can I find penny stocks? There are a number of online resources, which provide a list of penny stocks, as well as daily trading activities for those stocks. These sites may also provide limited research and analysis, as well as access to investor chat rooms and discussion forums. The NASDQ website and your online trading platform will also have lists to penny stocks. Are penny stocks risky? There is an inherent risk in all stock trading. Long term investors may have designed their portfolio to withstand the daily, monthly, or yearly market swings, while penny stock investors are looking to turn a quicker profit. In that sense, penny stocks may be a riskier investment than more traditional stocks. Penny stocks are not as regulated by the Securities and Exchange Commission as more traditional stocks. Unless they are listing on the NASDQ micro-cap board, most companies are not subjected to the same regulations. This increases the risk of fraud and stock price manipulation. The bottom line, however, is that investing is risky. Investors choosing to explore the penny stock market may be susceptible to more risk than other investors. Are you looking for more information regarding penny stocks? Visit http://www.smart-investing-in-stocks.com/invite.html today for more information!
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