The Basics of Penny Stocks to follow in 2019
If you’ve been reading about stocks and trading for some time now, then there’s a good chance you’ve already heard of “penny stocks.” Penny stocks are the small, low-priced stocks that appear in various markets, including the NASDAQ and NYSE. Importantly, there are penny stocks that trade on less-regulated stock markets, but these are the ones that often lead to problems with fraud and scams. If you want to keep your money as safe as possible, we recommend sticking to the penny stocks that are available on the NASDAQ, to begin with. Despite their misleading name, most penny stocks aren’t available for a penny. On average, a penny stock can be anything under $5 per share, and there are some people who will give the name “penny stocks” to shares that trade for slightly more than this too. As with many things, the definition of a penny stock can change depending on who you ask.
How to Buy a Penny Stock
To buy a penny stock, you’ll need to go through someone called a “stockbroker.” You should be able to purchase penny stocks through a stockbroker regardless of whether they’re listed on the major exchanges. However, even if you are working with stock brokers, it’s important not to encourage them to go searching for cheap deals in places where stocks are not regulated.
When stocks are sold on un-regulated stock trading environments, there’s a good chance that people will lie about the business or fail to provide useful information that could help you to make better decisions with your money. Although some people don’t consider the penny stocks listed on the NASDAQ to be real penny stocks, the truth is that they allow you to trade at large volumes, without having to take on too much risk. Alternatively, the Over the Counter and Pink Sheets stock markets frequently lead to significant issues for penny stock investors.
The Pay Off of Penny Stocks
The important thing to remember is that penny stocks are risky. Most of the time, these stocks belong to companies that don’t have a lot of background in their chosen industry, which means that it’s difficult to find information that will help you to make a positive trading choice. Additionally, there are often tales of people purchasing penny stocks that turn out to be nothing but scams.
However, despite the risky nature of penny stocks, these shares can also be a great way to make a lot of money fast. Some of the biggest companies in the world, including Ford and Slack started off as nothing more than a penny stock. Remember, all companies have to start somewhere. If you can pick your penny stocks carefully, and avoid getting involved with the dangerous trading floors, then you could see that your penny stocks jump in price by huge levels in a matter of days or even weeks.
The key to penny stock trading is knowing how to read the market. If you can get the hang of handling penny stocks, then trading them can be a huge thrill, even to the most well-versed investor.