If you’re looking to invest in penny stocks there are a few things that you should know about penny stock trading before you start. Penny stocks are high risk investments and many people avoid them because of this.
These stocks do not trade on the bigger exchanges such as the NYSE or the Nasdaq but instead trade on the over the counter bulletin board and the pink sheets. These stocks are under $5 a share but will also be found under $1.00 a share most of the time. Many newsletters publish penny stock ideas on a daily basis sometimes. This can be a valuable resource when looking to find which penny stocks are worth looking at in the market. You must perform your own research on any tip given to you, as nothing is a sure thing.
It’s hard to predict the movements of penny stocks sometimes as these are very volatile investments. They can move up and down very quickly.
These are often small companies just starting out and don’t have enough capital yet to trade on the bigger exchanges.
There are many benefits to trading penny stocks. They are cheaper so you can buy more shares and because they move so quickly, you don’t have to wait months or years for a good return on your investment.