Here is tutorial on penny stock trading.
Penny stocks means trading in shares that range from a fraction of a penny to nearly $5. These stocks also got their name as they are worth pennies on the dollar. Investing in them can give you a tremendous reward potential. These stocks got their name as they are worth just pennies on the dollar. Share prices can at times seems quite crazy. For instance, a stock trading for $.0001 might seem quite strange to you. Most people have no conception that stocks can be traded at that price. But, the biggest advantage of these stocks is that you can actually buy a billion shares of a stock at those prices. In case, your stock shows an increase of 10 percent then you can have lots of money. Most of them grow quite rapidly compared to regular stocks.
Investing in these stocks can boost your reward potential. Also, they can prove riskier than other investments. The only reason why they are risky is as many of these have risen from just 25 cents to $20 while there are few others that have become quite worthless. They are also said to be quite a risky venture as firms did not provide detailed information on penny stocks trading and also information about the firms themselves.
Also, just buying and trading in penny stocks can bring about excellent returns on the investment. Also, if you research well then you can reduce the amount of involved risk. These are also known as a micro-cap stock and they are usually traded as over the counter stocks. Also, in most cases you will have to pay the broker’s fee on the percentage of the total sale rather than a transaction fee.
It is quite best to buy a variety of stocks and that will give you space for growth and risk. Take for instance, if you purchase 10 different stocks and have 9 that either fail or stay stagnant. Also, you can make tons of money even if one of those 10 penny stocks goes through the roof. This is the target and dream of every individual who buys them. And, penny stock investment should be your side hobby and that can actually reap benefits depending on the firm and their growth rate.
Hot penny stocks are those that are poised for big gains. These are the small cap penny stocks that could be on the verge of a massive breakout. There are few websites that offer you update on hot penny stocks. You can also subscribe to their services for a free newsletter.
The real form of a penny stock is a stock that trades on the counter bulletin board exchange (OTCBB). But, before you buy any penny stocks on OTCBB, you need to set up a brokerage account. You should also sign up with a broker who will let you do over the counter trading.
