Penny Stocks – What Are They and Can You Make Money Trading Penny Stocks?

Stocks that are top-listed among penny stocks are called penny stock picks. They are also called micro-cap or small-cap stocks and usually sell for less than $1.00 per share, although some sell for as much as $5.00 per share, also called penny stocks.

Penny stocks are traded on the “pink sheet” or over the counter (OTC), they are not usually traded on major exchanges such as the New York Stock Exchange (NYSE) or the American Stock Exchange (AMEX). These types of stocks are considered risky but popular among financial speculators.

Of course, there are some risk factors to consider if you decide to try your hand at penny stock trading. Most are offered by smaller, newer companies, and risks are often associated with that fact. These include stock market jitters, lack of visibility, reduced marketability, equity risks, and prices are subject to volatility and dilution.

The main advantage of Penny stocks is that they do not require a large investment to start trading, and they can turn a minimal investment into a large profit.

Information in newsletters, help from a stockbroker, and using your own personal judgment are ways to help pick profitable stocks. There are online brokers that can also assist investors in trading these types of stocks.

Some factors to look for when choosing a penny stock are promising business plans, excellent trading volume, and the economic stability of the company. It should be noted that investors should be informed of all possible risks associated with penny stock trading, especially with regard to free stock options. Therefore, the more a person spends on penny election methods, the more likely they are to include higher quality elections.

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