Penny Stocks are usually priced below a dollar and trading with them is fickle and risky game.
While Penny stocks look like they follow the "more bang for your buck" principle, having a lot of penny stocks is very risky.
Penny stocks are also referred to as small caps and micro caps.
As with all trading penny stock trading has its ups and downs.
Penny stocks can give your large profits over a short time; they can also give you huge losses in the same short time.
Because of the high risks and alluring prices of penny stocks traders should be mindful of a few things; o Traders should spend some time investigating the current ownership distribution of the stock they are interested in.
If stocks look unappealing to you, and you decide not to buy them, it is highly possible that if you had brought them you would have a hard time selling them.
Simply because if you were apprehensive other traders will feel the same.
For instance if a particular stock is priced very low, and most of the shares are owned by one overseas account, generally once an 'at home' investor invests there will be some heavy selling will then occur.
Then once the stocks price (your stocks price) starts climbing other traders will be less interested in your stocks.
Which leaves you will useless stocks.
So be careful when buying stocks that have uneven ownership distribution.
o While it seem silly to include this point, many traded get duped by illegitimate stocks, so it's worth mentioning.
As with any stocks you would spend some time researching the corporation and checking how legitimate they are.
The simplest and easiest way to check out a corporation is to phone them.
Even if they are not legitimate they still may have a phone number.
So look up their website and check their contact details with the local telecommunications provider.
Then cross check that information using the interest and taxation websites.
If you cannot find contact information for a company it's probably not a good idea to invest in it.
Also if you feel that the company is 'too friendly', perhaps the CEO speaks with you personally, then forget about it.
Over interested normally means that that company isn't already in good standing.
o Take a look at the companies history.
If the penny stocks that you are interested in are at that low price for a reason, that means that they are risky and possibly not a good idea.
For instance if a company has been through a lot of splits and mergers then you can never be sure what will happen next.
Also if the company hasn't been around for long, there isn't a track record for you to rely on.
o As with purchasing any stocks you should look at your own finances before purchasing stocks of any value.
Just because penny stocks can be purchased for very little it doesn't mean you can afford to lose the amount.
Have a look at your bankroll, which refers to the amount of cash you are willing to lose.
Penny stocks are risky so if you can't afford to lose the money don't play the game.
Penny stocks are often associated with corporations with little history and information out about them.
Getting on at the bottom floor can sometimes be a good thing, leaving you with high profits but if you make a mistake it can leave you with high losses.
While Penny stocks look like they follow the "more bang for your buck" principle, having a lot of penny stocks is very risky.
Penny stocks are also referred to as small caps and micro caps.
As with all trading penny stock trading has its ups and downs.
Penny stocks can give your large profits over a short time; they can also give you huge losses in the same short time.
Because of the high risks and alluring prices of penny stocks traders should be mindful of a few things; o Traders should spend some time investigating the current ownership distribution of the stock they are interested in.
If stocks look unappealing to you, and you decide not to buy them, it is highly possible that if you had brought them you would have a hard time selling them.
Simply because if you were apprehensive other traders will feel the same.
For instance if a particular stock is priced very low, and most of the shares are owned by one overseas account, generally once an 'at home' investor invests there will be some heavy selling will then occur.
Then once the stocks price (your stocks price) starts climbing other traders will be less interested in your stocks.
Which leaves you will useless stocks.
So be careful when buying stocks that have uneven ownership distribution.
o While it seem silly to include this point, many traded get duped by illegitimate stocks, so it's worth mentioning.
As with any stocks you would spend some time researching the corporation and checking how legitimate they are.
The simplest and easiest way to check out a corporation is to phone them.
Even if they are not legitimate they still may have a phone number.
So look up their website and check their contact details with the local telecommunications provider.
Then cross check that information using the interest and taxation websites.
If you cannot find contact information for a company it's probably not a good idea to invest in it.
Also if you feel that the company is 'too friendly', perhaps the CEO speaks with you personally, then forget about it.
Over interested normally means that that company isn't already in good standing.
o Take a look at the companies history.
If the penny stocks that you are interested in are at that low price for a reason, that means that they are risky and possibly not a good idea.
For instance if a company has been through a lot of splits and mergers then you can never be sure what will happen next.
Also if the company hasn't been around for long, there isn't a track record for you to rely on.
o As with purchasing any stocks you should look at your own finances before purchasing stocks of any value.
Just because penny stocks can be purchased for very little it doesn't mean you can afford to lose the amount.
Have a look at your bankroll, which refers to the amount of cash you are willing to lose.
Penny stocks are risky so if you can't afford to lose the money don't play the game.
Penny stocks are often associated with corporations with little history and information out about them.
Getting on at the bottom floor can sometimes be a good thing, leaving you with high profits but if you make a mistake it can leave you with high losses.
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