What are penny stocks?

Penny Stock: The penny stocks or shares are an investment options for those who have a small amount for investment and are willing to take risk. These stocks are generally available in very small amount and even a small investor can take a risk of investing few cents in these stocks.


Although there is some risk associated with every investment in financial market, penny stocks are good option for investment if you have some disposable amount, as here a small amount will be at risk. Broker or dealers trade these stocks and it is better to understand the financial terms associated with penny stocks. I would like to add that if you are looking some penny stocks for investment, you should learn more about penny stocks and you can find the relevant information about the subject on stock newsletter and message boards.


Stock Trading: Penny stocks are very speculative and have a market capitalization of around 500 million. These stocks are traded over the counter and the trading is governed by the SEC rules and guidelines on penny stocks. U.S Securities and Exchange Commission have laid down some rules for investment and trading in penny stocks and a beginner should keep these rules in mind before buying or trading in penny stocks.


SEC Rules on Penny Stocks: Broker-dealer registration compliance is must before buying or trading any penny stocks. A broker or dealer should get a written request and thereafter should approve the investor.


SEC further rules that a customer desirous to purchase a penny stock should be provided a document mentioning the risk involved in the penny stock. The broker or dealer should also inform the customer the current market rate of the penny stock and the commission that will be charged by the broker.


The provisions made in the appropriate sections also put a mandatory requirement of providing monthly statement to the investor showing rates of each penny stock held by the investor in his account.


Sometimes the other terms such as small caps and micro cap are also used for these companies and The United States Securities and Exchange Commission has defined penny stock as a low-priced below $ 5.0 speculative securities of very small companies.
Many small companies have low assets and offer the stocks at very low price. These low price stocks known as penny stocks are traded over the counter generally in low volumes.


The Securities and Exchange Commission strictly adheres that penny stock is low priced speculative stock and the term penny stock does not relate on market capitalization or it’s trading at the exchanges (NYSE, NASDAQ) or over the counter.


Summary: Penny stock’s definition by the Securities and Exchange commission is strictly on the basis of its value and it does not depend on other parameters such as the companies market capitalization or its listing. Investor should carefully examine all the factors associated with penny stocks before investing in them.


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Learning More About Penny Stocks

There’s so much information out there on different stocks, and advice on how to play the stock market. But which advice do you trust, and how do you know that you’re getting good advice? When it comes to learning more about penny stocks, do you know where to start?


Finding out what penny stocks are, and how to trade in them, is the first step in trading penny stocks. After all, if you’re going to invest you want to know what you’re investing in and the best way to do it, right? This only makes sense. But many investors want to learn all they can about stocks, before they invest their valuable money – and their time, which is sometimes even more valuable than any amount of money.


So how do you go about learning more about penny stocks? A good place to start is the Internet, and not those spam e-mails that talk about penny stocks – never trust those. But there is valuable information to be found online, and knowledgeable people who will answer any questions you may have. The Internet can always be a valuable source of information on any topic – as long as you remember not to trust everything you read you find online. It’s always good to double and triple check any facts you unearth online, just to be on the safe side.


But for chatting with others and learning public opinion, there is no better forum. And isn’t talking to fellow investors the best way to learn about investing? Those who have played the market using penny stocks are the people who will be able to offer you the best information and advice. They can tell you what they did, and perhaps even answer questions.


You’ll find online forums, chat groups, discussion boards, and entire sites dedicated to investing in all kinds of stocks. You may even be able to find some penny stock-dedicated forums and groups, where you can learn about the stock type that most interests you. This is a great way to find out what real people are saying about their stocks, and if they’re actually making any money with them. Some people may brag about huge returns and this sort of information should perhaps be taken with a grain of salt, unless stock numbers seem to match their claims. As you talk with people and learn more, you’ll become more and more familiar with the penny stocks of your choice.


After all, it’s not like you can just take your broker’s word for it. When it comes to your money, you should learn all you can about where you’re investing and what you’re investing into. The Internet is a great source of information, and you can look up penny stocks and penny stock information online as well as chat with other investors. There may be some false information, but there is a lot of really good information – and the only way to find it is to look. Talk to others, and learn more about penny stocks before you invest. It may help you may bigger profits and enjoy bigger returns, as a result.


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Penny Stock Prophet

A lot of investments may seem not suited to small investors. Because the price of mid-cap or big-cap companies’ stocks are out of the range of small investors many times, a blue chip stock can sell for hundreds of dollars, and you don’t have any gold jewelry to turn into ready cash. As a small investors, you don’t have any choice. You just stay in your 401k and save until retirement. However, today’s stock markets give you more choice. You can buy penny stock.


Can small investors buy penny stock? The answer is yes. Individuals actually can buy penny stock.

Click  Here  for  the  Penny  Stock  Prophet

The first thing that give you chance to invest in stock market is price. Penny Stocks are those that sell for less than 5 dollars. They are sell some and you can volatility enough to end up with a boatload of money with a day trading. That means small investors are afford to buy penny stock.


Another thing which allow you to buy penny stock easily is the internet. With new the development in technology, more and more people are available to computers. Then the online trading appear. The popularity of buying penny stock online are rapidly grown. Buy penny stock help investors to get the best out of the hard earned amounts. The other benefits for individuals buy penny stock online are: convenience, ease of buying and selling, provides mobility for the  investors. The internet has helped increase every aspect of day trading and offered expedient trades for every fast moving market.


The great advantage of buy penny stock online is that you can trade in stocks at the comfort from your home. You do not have to stay at the stock market hall to trade your shares. Moreover, speeds of data delivery are fast It is so fast and effective that any transaction does not take more than few minutes and the effective is so instantaneous. Trade are cheap through Internet. With another sentence, you can work part time as a stock trader. You work on stock market at your own time,and your own pace. It is not a block to your other professional activities.


Can individuals who buy penny stock make money? That is the biggest concern of investors. The answer is yes, you can. You can make a lot of money if you know the rule. Because the price of buy penny stock is low and volatile, it is possible to make a lot of money on a very small penny stock investment. All you need to do is do a little research on the particular companies that you wish to invest in. These companies mostly relying on one or two products to put them over the top. They just need money to promote products. After the products are launched, you could earn big amount of money if you have do penny stock investment on these companies.

Click  Here  for  the  Penny  Stock  Prophet.

How To Avoid Stock Risk

Most people who learn to invest stock seem to be so concerned with the penny stock profit and  how to get the high profit possible. The answer to this question is simple. Profit is directly related to RISK.


Stock trading disasters are common phenomenon among stock market traders who just begin to learn to invest stock.. As a beginner, it is easy to forget the fundamentals of proper trading when you are blinded by all the get rich quick propaganda that goes along with being a trader. Earning big money runs ramped within the mind of new traders. Here I will share some my experience how to avoid stock risk.Click Here for the Stock Never Loss Secret When I begin to learn to invest stock, I told to myself that not all the stock invest rules of becoming a successful trader were suited to me. Not all the rule applicable to everyone. Actually,  I hope to lose a lot of my money to quickly sobered me up.


To be honest , I was a beginner who just begin to learn to invest stock. I often spend a lot of time to learn to invest stock. Learn to invest stock in the stock market was no exception. So, I get some ideas to avoid stock risk.


  • Unsystematic risk of learn to invest stock is the risk you take on when investing in stocks. Basically it is the risk of some earnings reports, or new announcements coming out that could affect the price of the stock. Market So if you buy a stock which it is good now and all of a sudden the company comes out a bad news. You will lose money because of these unforeseen news. Don’t worry. I will tell you some methods to avoid this: If you are an trader who learn to invest stock and want to hold for the long term, one thing you can do is to purchase several different companies. If you buy 15-25 different stocks and some bad news comes out for one of your stocks it will not affect your overall portfolio as much.

  • Make decisions based on facts not emotions! Wishful and Hope thinking are two qualities that gamblers hold. Have you read about any successful stock market gamblers? Just face it; Everyone  will make mistakes when they begin. As you step into the stock market, you must be willing to make corrections quickly.

  • As you learn to invest stock market you’d better learn to stop loss. After placing your order, always set a stop. It is the only insurance policy a stock trader has against massive losses.


So it can be good ideas to avoid being in during these times. There will always be positions out there that you can take without having to worry about earnings.

Click Here for the Stock Never Loss Secret