Penny Stock Research Paper
How To Trade Penny Stocks Online
Trading in penny stocks can be a profitable endeavour, if the investor does adequate amount of research and doesn’t get swayed by the myriad of newsletters and email scams promoting trashy companies. The investors will benefit by following a few important steps, while trading penny stocks.
The Basics-What are penny stocks
There is no accepted definition of a penny stock, also known as over-the-counter (OTC) stock. Usually, a stock, which doesn’t trade on the major exchanges like the New York Stock Exchange and the NASDAQ, quotes at a price of less than $5, is highly illiquid and speculative is accepted as a penny stock, according to the Investopedia.
As there is no standard norm, a few brokers consider stocks quoting under $3 or …show more content…
“You can’t invest in penny stocks as if they were lotto tickets, but unfortunately that’s what most people do, and they lose again and again. Think of penny stocks as inmates in a prison that you can’t trust,” reports Market Watch.
Hence, investors should be careful before investing any money into penny stocks.
How should you allocate money to penny stocks?
The penny stock companies and their promoters use various social media advertising, newsletters, email campaigns, and other such methods to boost prices of the companies. Pump and dump is the infamous strategy used by the manipulators. If you want to avoid getting caught in such a scam, keep the following points in mind before investing in penny stocks.
1. Disregard stories of quick riches where traders are advertised to having made millions within a short span of time using penny stocks.
2. Do your own research on the available information about the stock before investing, rather than blindly allocating money on hot tips.
3. Never believe the management of the companies promising a bright future. Penny stocks are usually full of false stories, never accept their news at face value. Always do your background
Trading in penny stocks can be a profitable endeavour, if the investor does adequate amount of research and doesn’t get swayed by the myriad of newsletters and email scams promoting trashy companies. The investors will benefit by following a few important steps, while trading penny stocks.
The Basics-What are penny stocks
There is no accepted definition of a penny stock, also known as over-the-counter (OTC) stock. Usually, a stock, which doesn’t trade on the major exchanges like the New York Stock Exchange and the NASDAQ, quotes at a price of less than $5, is highly illiquid and speculative is accepted as a penny stock, according to the Investopedia.
As there is no standard norm, a few brokers consider stocks quoting under $3 or …show more content…
“You can’t invest in penny stocks as if they were lotto tickets, but unfortunately that’s what most people do, and they lose again and again. Think of penny stocks as inmates in a prison that you can’t trust,” reports Market Watch.
Hence, investors should be careful before investing any money into penny stocks.
How should you allocate money to penny stocks?
The penny stock companies and their promoters use various social media advertising, newsletters, email campaigns, and other such methods to boost prices of the companies. Pump and dump is the infamous strategy used by the manipulators. If you want to avoid getting caught in such a scam, keep the following points in mind before investing in penny stocks.
1. Disregard stories of quick riches where traders are advertised to having made millions within a short span of time using penny stocks.
2. Do your own research on the available information about the stock before investing, rather than blindly allocating money on hot tips.
3. Never believe the management of the companies promising a bright future. Penny stocks are usually full of false stories, never accept their news at face value. Always do your background