What are Penny Stocks - Where to Find Penny Stocks
Do you know what are penny stocks? Penny stocks are cheap way of entering the share market and give you an option of higher return on investment. With as low as $25,000 of investment you can get yourself a lot of shares by buying the penny stocks. Find more information below that will help you trade in penny stocks.
Penny stocks are shares owned by public companies that are often undervalued, with prices as low as $ 5.00 or less. These actions are characterized by high risk and high reward value, which means that price levels are known to fluctuate at certain levels that give you the opportunity to have high profits and a higher probability of losing its value. Most penny stocks are used as a financing tool for small businesses that need more capital for its operations and expansion. A lot of investors however have stayed away from penny stock trading because of the bad reputation associated with it. But this is only a consequence of the lack of investigation by the investor. With proper analysis of the background of a company and a council for a credible broker, there is no reason for investors to stay away. Penny stocks are usually traded in different markets. The quality of markets and business practices that will most likely tell the quality of penny stocks that are traded. If you plan to buy a penny stock that is owned by a company in a regulated market, then it follows with all the necessary financial requirements for that market. The safest places to find penny stocks are small NASDQ Market and exchanges of America.
The NASDAQ Small Market Cap is the best place to trade for penny stocks. Listed companies in this exchange follow different compliance and financial report procedures. Information on the background of financial companies can be found on their website, and some companies offer a summary of the results of the previous year to assure investors of its progress. Liquidity in this market is very good and most of its operations will be matched easily. The average price of penny stock that appears in this exchange is $1.00 and above.
The Amex or American Stock Exchange is the best place to look for undervalued stocks. Like the NASDAQ, the companies listed here must also meet the financial requirement determined from shops. Market liquidity is not as efficient as NASDAQ, but still better than other markets.
Another place that you can look into is the OTC-BB (over the counter bulletin board). The OTC-BB is an appointment service that follows specific rules to operate. This activity provides real-time stock trading. Just bear in mind that the OTC-BB is not counter, as the name can be confusing at times. The OTC or OTC market is the regulation that requires not much regulation. There is almost no market liquidity, so that the shares acquired will be tough to sell.
There are information services that provide advice, tips on hot penny stock, free newsletters etc. It is also best to seek professional help in trading but it all depends on your budget and your need. You can get free investment ideas at Wall Street Wins.
Wall Street Wins Specialize in selecting micro cap companies that represent breakaway stocks with real upward potential based on facts. Get Wall Street Win free investment ideas and talk to one our investor relations consultants for free.