Penny Stocks

Penny stocks are stocks that are considered to be cheap and they are stocks of companies which usually have a value of less than $50 million. As these companies are far smaller than the blue chip companies whose stock is traded on the NASDAQ or NYSE, not so much is known about them and so investing in any will almost be like making a blind investment and so it is thought that only 10% of penny stock investors actually make money from their investments. For this reason many of the traders on the larger stocks in the larger stock markets, consider penny stocks as being a gamble rather than an investment. They may be right but that is sometimes the attraction as, like with many forms of gambling, the rewards can be high. Although this means that 90% of those that do trade penny stocks do not make a profit, some of the 10% that have made profits, have gone on to become millionaires and are known as penny stock millionaires. The companies that trade their stock on the better known stock markets come under the jurisdiction of the Securities and Exchange Commission (SEC) which require them to let investors know a certain amount about their company before they can start trading their stocks however, the smaller companies which allow their shares to be traded as penny stocks, are not under such an obligation and so do not have to reveal anything about themselves if they do not wish to. This means that someone that does invest in penny shares is often doing so blind, as far as knowledge of the company is concerned. If you are still interested in investing in penny shares then you will want to know how to buy penny stocks and perhaps the easiest way is to find a stock broker that deals in them as yes, some do. It isn’t that trading in penny stocks is a particularly bad thing as you can and 10% of people that do trade in them, do make a profit however, it is probably best to consider it more of a gamble than an investment and so you probably should treat as a gamble and not do it if you cannot afford to lose the money. If you can afford to lose the money and so don’t mind gambling it in penny stocks, you could receive some very large rewards as penny stock millionaires do exist and so there is no real reason why you might not be the next one. Obviously the large corporations and companies weren’t always that big, they too mainly started as small enterprises and so one of the companies you do start investing in as a penny trader, if that company grows and itself becomes big enough to trade its shares on the larger, better known markets, you will already have your foot in the door and possess some of their shares which, like the company, could also make you a big player.