Inexpensive penny stocks can be an attractive form of investing for the newbie trader. Low prices make it possible to trade many shares and this can make one big money in a short amount of time. That seems like a great way to make a living but it is not without pitfalls, and it is best to know a few things before you start.
The newbie that wants to know how to trade penny stocks should take the overall risk factor into serious consideration. These types of securities are not hard for anyone to manipulate, because they are so cheap. Just the slightest bit of negative or positive news can be enough to make a big difference in prices.
If you spend your hard earned money on cheap stock investing you do not have a lot of protection. Dependable securities from major corporations are traded on big time stock exchanges, which are subject to a great deal of regulation. Most penny stock picks are made from information obtained from the Over-the-Counter Bulletin Board (OTCBB) or Pink Sheets.
Pink Sheets is released by the National Quotation Bureau. The publication gets its name from the pink paper that it was published on originally. This company provides information on OTC companies. An over-the-counter stock is one that is not listed in the big exchanges. Pink Sheets offers a lot of OTC info but their listings are not the only ones. Their stocks are considered high risk because companies do not have to file information with the SEC or Security Exchange Commission.
Pink Sheets and the Over-the-Counter Bulletin Board are not the same thing. The OTCBB has stricter rules than its competition. For instance a company that lists with them must file a report with the SEC. While NASDAQ operates the OTCBB, Pink Sheets is a privately run entity. You can go to the OTCBB site and research stock and companies. Yet, when it is time to buy or sell, it must be done through a broker.
It is always best to research any penny stock investing opportunity completely before you buy. You can go to the SEC website to check out a company. You also may check out a company's ratings with the OTC Markets website. This service rates companies according to how much information they provide investors.
If you cannot find information on the financial health of a company it should be a red flag. You should not consider investing unless you can find financial statements released by the company, and then you should study them thoroughly. You will find good info at stock resource sites. Some are free while others charge a minimal fee.
Over-the-counter securities cannot be traded directly, as you must buy and sell through a broker. Full service and discount brokerage services are available. One of the most important things to remember is research. This will lessen you risk and increase your investment potential. If you decide to invest in penny stocks, you are taking significant risks. However, you will have the potential to make a lot of money if you are careful and knowledgeable.
The newbie that wants to know how to trade penny stocks should take the overall risk factor into serious consideration. These types of securities are not hard for anyone to manipulate, because they are so cheap. Just the slightest bit of negative or positive news can be enough to make a big difference in prices.
If you spend your hard earned money on cheap stock investing you do not have a lot of protection. Dependable securities from major corporations are traded on big time stock exchanges, which are subject to a great deal of regulation. Most penny stock picks are made from information obtained from the Over-the-Counter Bulletin Board (OTCBB) or Pink Sheets.
Pink Sheets is released by the National Quotation Bureau. The publication gets its name from the pink paper that it was published on originally. This company provides information on OTC companies. An over-the-counter stock is one that is not listed in the big exchanges. Pink Sheets offers a lot of OTC info but their listings are not the only ones. Their stocks are considered high risk because companies do not have to file information with the SEC or Security Exchange Commission.
Pink Sheets and the Over-the-Counter Bulletin Board are not the same thing. The OTCBB has stricter rules than its competition. For instance a company that lists with them must file a report with the SEC. While NASDAQ operates the OTCBB, Pink Sheets is a privately run entity. You can go to the OTCBB site and research stock and companies. Yet, when it is time to buy or sell, it must be done through a broker.
It is always best to research any penny stock investing opportunity completely before you buy. You can go to the SEC website to check out a company. You also may check out a company's ratings with the OTC Markets website. This service rates companies according to how much information they provide investors.
If you cannot find information on the financial health of a company it should be a red flag. You should not consider investing unless you can find financial statements released by the company, and then you should study them thoroughly. You will find good info at stock resource sites. Some are free while others charge a minimal fee.
Over-the-counter securities cannot be traded directly, as you must buy and sell through a broker. Full service and discount brokerage services are available. One of the most important things to remember is research. This will lessen you risk and increase your investment potential. If you decide to invest in penny stocks, you are taking significant risks. However, you will have the potential to make a lot of money if you are careful and knowledgeable.
About the Author:
When you need to find help for your trading, take a look at tips and techniques by reviewing penny stocks for dummies at our web pages here. You can see information about penny stocks to watch online now.
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