Penny-Stock Trend

5 Top Online Stock Brokers

2011-11-20T01:38:00.001+00:00

Investors should know the best online stock brokers to trade with. The following top online brokers offer traders the most value for their investment portfolios.
Some online stock brokers are known for their award winning customer service while others are known for inexpensive or even free stock trades. This guide will highlight some of the best stock brokers available today.

1.ETRADE was ranked #1 Online Broker 2011 by StockBrokers.com. E*TRADE offers trading anytime, anywhere with Etrade Mobile Pro and Power ETRADE Pro offers active traders world class trading tools.
Current E*TRADE Offer: Trade free for 60 days (500 free trades max) + Get up to $500 with any new account!
Open an account at ETRADE

2. thinkorswim
thinkorswim was rated the #1 Online Broker 2010 by Barron's*. Offering one of the best known trade platforms for active traders, the broker was rated as “best for frequent traders,” and “best for options traders” in 2010 by Barron's*.
Stock trades are a flat-rate $9.99 per trade or $.015 per share with a $5.00 minimum.
Open an account at thinkorswim

3. TradeKing
TradeKing offers investors fantastic customer service, ultra competitive trade commissions, and is home to the Trader Network with over 200,000 investors all sharing trade ideas, research, and market analysis..
Current Offer: Switch to TradeKing and get up to $150 in transfer fees reimbursed.
Open an account at TradeKing

4. OptionsHouse
OptionsHouse was ranked the Best Broker for Discounted Trading 2011 by StockBrokers.com and offers $3.95 flat fee trades alongside two flexible rates for options trading.
Current Offer: Receive 100 free trades with any new account!
Open an account at OptionsHouse

5. Scottrade
Scottrade was honored as #1 for Customer Loyalty 2009 by Brand Keys.
Scottrade has over 400 local branch offices for personal service and offers competitive $7 flat-fee stock trades. Scottrade clients can also take advantage of premium trading tools through the Scottrade Elite and OptionsFirst platforms.
Open an account at Scottrade

Online Brokers Comparison Chart
Compare online brokers with our stock brokers comparison chart! All the online stock brokers and discount stock brokers mentioned above are featured. Included are easy to read star ratings, pricing and fees information, and even a features overview section to see every broker's latest promotional offer.

3 Tips for Comparing Brokers
When choosing your online broker, here are some great tips to remember to help you decide:

Narrow down a list of what is most important to you - Just because a broker offers cheap commissions or live customer support with local branch offices doesn't mean it is the right broker. Just like when shopping for a new home, making a focus list of wants will help you separate choices to ultimately make a decision. For an investor that travels often for example, mobile trading will be more important than the cost of placing trades.
Choose a broker with high acclaim and that is well known - The larger the online broker is almost always equates to more features, functionality, tools, better customer service, etc. Some brokers have hundreds of thousands of clients, if not millions, and these are the ones that almost always deliver the best trader experience.
Be aware of miscellaneous fees - This relates to #2, but be conscious of what fees the broker is charging. No smaller brokers are recommended on this site specifically for this reason. There are usually many hidden fees that are only found by digging through their website. To see what fees brokers charge, I recommend using the stock broker reviews on StockBrokers.com.

For more help in this area see my article How to Choose the Best Online Broker.
thinkorswim was rated #1 overall online broker, "best for frequent traders," and "best for options traders" in the 2009 Barron's ranking of online brokers (3/16/2009), and the 2010 Barron's ranking of online brokers (3/15/2010). Barron's is a registered trademark of Dow Jones & Company © 2010.

thinkorswim, Division of TD Ameritrade, Inc. and Reink Media Group LLC are separate, unaffiliated companies and are not responsible for each other's services and products.

Adapted from http://www.stocktradingtogo.com

5 Traits of a Highly Successful Investor

2011-11-20T01:25:00.000+00:00

Five traits of a highly successful investor (in no particular order):
1. Discipline - Every investor has to be disciplined in the market. If you can't follow your own rules and stick to a strategy, you may find yourself laying dead in the battlefield faster than you know. Discipline is the most important trait of a successful investor because the market is full of temptation to make dumb mistakes day in day out.

2. Patience - Act too quickly and you may just get burned. Some traders will step back and wait months before making a trade, why? Because they are patient hunters looking for the right moment to strike. You can't rush art, and especially when day trading, every penny truly makes a difference.

3. Dedication - If you aren't dedicated to the market, you may as well go work at a quickie mart. Some of the best managers are up at 4:30 AM if not earlier to start their day and map out potential plays. I don't care how late you stayed up last night, if Microsoft announces they are buying Yahoo (which rumors spread last week), you have perhaps a several minute window (if you are lucky) to buy in before value has completely been realized.

4. Guts - When you bet nine months in advance that Apple is going to take off and you place $100 million on the table, you have guts. Some of the best traders in the world have taken bets that no one else saw or agreed with, but had the last laugh in the end. And you think your mom is ruthless, if hedge funds find out your firm is on the edge of crumbling and you are holding a few big positions, watch out!

5. Perseverance - Probably the X factor of successful trading, perseverance is critical to success because let's face it, not everything is going to go your way. No one cares that you have thirty years experience behind you, without a solid track record you are a nobody. But, the more you continue to educate yourself and learn the little tricks of the trade, the more you are going to make in the long run. The best part of the stock market is that history has shown the game repeats itself, you may loose your rear today, but in three months when the same trade comes around, you will know what to do.

Adapted from http://www.stocktradingtogo.com

How to Open Your Brokerage Account

2011-11-20T01:16:00.000+00:00

By Matt Krantz

After you’ve made the decision about which broker to help you manage your online investments, the hard work is done. All you need to do to get started is open an account and get your cash to the broker. You can do this online or through the mail.

If you’re comfortable opening a brokerage account over the Internet, the online route is definitely the way to go, because the cash can be transferred from your bank account and you can be up and running in a few hours or days. Signing up by mailing in a check and application, on the other hand, could take weeks.

Don’t be shocked by the seemingly endless number of questions you’ll be asked when setting up a new account. It’s common for the broker to ask for your social security number and other personal information. Given the sensitivity of the information you’ll be sharing, that’s all the more reason to make sure that you understand online security.

The biggest button on most brokers' Web sites is the Open an Account or Start Now button, so you won’t have trouble finding it. Typically, that’s all you need to click to launch the area of the Web site that can set up your account. (If you want to sign up through the mail, click a link to download the necessary forms.)

Typically, you need to know three things to complete the application:
The kind of account you want to create: This is usually a cash account or margin account.

The number of people associated with this account: Is this just for you or for you and a spouse? This determines whether you create an individual or joint account.
The tax status of the account: Is this a taxable account or a tax-deferred account, such as an IRA or a fund for college?

Most brokers waive maintenance fees if you’re opening an IRA account because they figure you’ll keep your money with them for quite some time. Many also waive the minimum deposits. For these reasons, if you’re just starting out with online investing, you might consider opening a retirement account first.

You need these bits of info if you want to set up an account:
Identification, such as a driver’s license or government-issued ID card.
A Social Security Number is necessary, of course. If you’re creating a joint account, you’ll also need the Social Security Number of the person you’re setting up the account with. This is used for tax-reporting purposes.

The bank statement of the financial institution from which you’ll transfer money. This contains the account and bank routing numbers you’ll need to instruct the broker to get your cash. Keep in mind that some brokers won’t let you open an account with electronically transferred money if you’re depositing less than $500. In those cases, you need to mail a check.

The address of your employer if you’re an officer, director, or large shareholder of a publicly traded company. See, that wasn’t hard. And here’s the best part: Now that you’ve entered all your information and funded your account, you are all set to start investing.

Adapted from www.dummies.com

Understanding the Types of Brokerage Firms

2011-11-20T00:39:00.005+00:00

By Matt Krantz

Choosing a broker to help you in your online investing means deciding what kind of broker you need. Self-service brokers — those used most by online investors — are commonly grouped into three baskets: deep discounters, discounters, and premium discounters. The full-service traditional brokerages suggest investments, analyze your portfolio, and offer estate-planning services.

Double-check brokers’ fees before signing up — they change frequently. Also remember that some brokers might charge lower commissions if you pay a monthly subscription fee, meet certain balance thresholds, or hold other types of accounts in addition to the brokerage account.
Deep discounters: Trading for $5 or less: When you sign up for a deep discounter, you’re on your own. Leaders include the following:

BUY and HOLD: For $14.99 a month, you can place as many trades as you like, or for $6.99 a month, you can place two free trades. At those prices, the trades are queued up and carried out during one of three trading sessions over the course of the day.
Folio Investing: The Basic plan lets you trade stocks for a low price of $4 as long as you’re okay if the trades aren’t executed right away, but instead, during two “windows” during the day.
ShareBuilder: This site’s discounted $4 orders aren’t executed immediately, but rather, pooled and filled once a week.
Sogo Trade: If you plan to be a serious trader, SogoTrade lets you download software to your computer.
TradeKing: This broker offers you the ability to write checks against cash balances (for a fee), access to company news and research reports, and a straightforward flat-fee commission of $4.95. It’s geared largely for active investors who might exceed trading limits imposed by free offers from Zecco and want instant access to customer support on the phone.
Zecco: The $0 commission is hard to beat if price is what matters most to you. Trades are free as long as you place fewer than ten trades a month and maintain an account balance of $25,000.

Discounters: Trading for $5.01 to $10: If the thought of being completely on your own makes you nervous but you’re not willing to give up low-cost commissions, the discount brokers sit in the sweet spot for you:

Charles Schwab: Schwab kicked off the industry’s latest round of price cutting in early 2010 when it lowered its per-trade commission to a flat rate of $8.95 from $12.95.
E*TRADE: E*TRADE targets active traders with computer software such as MarketTrader, which lets you enter trades that will trigger automatically based on rules you set ahead of time. But E*TRADE offers beginners access to stock research from six providers and the ability to shift cash to a checking or high-yield savings account.
Fidelity: For years, Fidelity was a premium-priced online brokerage, but that changed in early 2010 when it answered Schwab’s price cut and slashed its commission even lower than Schwab’s, to $7.95.
OptionsXpress: Options trades can get mind-numbingly complicated, and some are best known by exotic names like butterflies, straddles, and strangles. OptionsXpress helps traders place these complex trades with easy-to-follow Web screens and systems to help track the profit or loss.
Scottrade: Its $7 commissions are low, but you still get access to branches, and it also has a separate service for active traders.
TD AMERITRADE: This brokerage’s low-cost roots are eroding, as its $9.99-per-trade commission is now more than what most its major rivals charge. But investors who trade frequently during the day like TD AMERITRADE’s bonus PC software trading tools.
Thinkorswim: The brokerage makes itself a little different by offering to pay for your Internet connection, up to $39.95 a month, if you trade 40 times or more a month. It also offers three free mutual fund transactions a month.
TradeMonster: Its $7.50-a-trade commission is compelling, and the site offers a variety of tools to help active traders.
Vanguard: The first 25 trades you make in a year are a competitive $7 if you have less than $50,000 in your account. After you trade 25 times, trades jump to $20.
Premium discounters: Trading for $10 or more: Premium online brokers aren’t the cheapest, and you can expect to pay $10 or more for stock trades:
Ameriprise: If you’re looking for access to professional help for all your financial questions, open an account with Ameriprise and expect to get calls from financial planners offering help.
Bank of America: Bank of America offers self-service brokerage fees with commissions starting at $14. Be careful, though, because the bank will hit you with a $50 fee twice a year if you don’t have other accounts with it.
Wells Fargo: Wells Fargo’s self-service stock commissions start at $19.95. But if you keep at least $25,000 in your accounts, you can get up to 100 free trades a year.

Full-service traditional brokers: Full-service brokers pride themselves on being part of your team of “people” who you call on routinely for advice. Services that these firms provide include

Constant stock recommendations
Access to initial public offerings
Availability of other financial services

But before you get too excited about the extra services that traditional full-service brokers may provide, you also have downsides to consider, such as high cost, and potential conflicts of interest.

Adapted from www .dummies.com

How to Trade in Penny Stocks

2011-11-20T00:29:00.000+00:00

By Matt Krantz

, due to their tiny share prices, allow online investors to buy large numbers of shares. Owning large chunks of stock is appealing, but penny stocks can also be easily manipulated. Unlike giant stocks like Exxon or Microsoft, which are so valuable that you’d need billions of dollars to budge the stock, penny stocks can be nudged with just a few hundred bucks.

Just a small amount of hype or negativity can have a large effect on a penny stock’s share price. A stock has to move only from one penny to two pennies to double a fraudster’s money.

Many penny stocks also trade on the generally unregulated Pink Sheets and OTC Bulletin Board markets, considered to be the Wild Wild West of online investing. It’s best to avoid investing in penny stocks, but if you can’t resist the urge, follow these guidelines:

Read the warnings from regulators: The Securities and Exchange Commission (SEC) has released multiple warnings to investors about investing in penny stocks. You can search for a company’s name and officers using the tools at the SEC’s main site to see whether prior problems have occurred.
Check the company’s level of disclosure: otcMarkets rates companies with one of eight icons that indicate how much information they provide to investors. The highest-quality rating is otcQX, followed by Pink Quote OTCBB, OTCBB Only, Pink Sheet Current Information, Limited Information, No Information, Grey Market, and then Caveat Emptor.
The OTC Bulletin Board offers similar information on its stocks. The site, for instance, has a Delinquency/Eligibility list showing companies that haven’t met its standards.
otcMarkets assigns one of eight easy-to-understand icons to stocks to let you know how much information is available about them.
Do your due diligence: You should, at the very least, see whether the company has released any financial statements. And if financial information is available, you should carefully analyze it.StockPatrol also features in-depth investigative reports of companies, including many penny stocks. StockPatrol’s search feature can show you whether a stock you’re interested in has been written about. Just reading the stories, meanwhile, can give you an idea on how to investigate penny stock companies.
Double-check that you can’t do better: With thousands of stocks listed on the NYSE and NASDAQ, you should be able to find a listed stock you’d like to invest in.

Adapted from www.dummies.com

A Basic Guide To Penny Stocks Investing

2011-11-20T00:04:00.000+00:00

Prasen Dutta

In penny stock investing, investors either see big gains fast or big losses fast. Penny stocks are regarded as ‘hot penny stocks' when the value of the stocks rises fast. When the tag ‘high volatility' is attached to a penny stock, it means that the particular stock's value goes up or down quickly. To make money on a hot penny stock, one needs to buy the stock on a low price, wait for that particular stock to rise steeply and then sell.

There are several online guides that can help one pick the best penny stocks. Here is a strategy that works quite well for most of the investors. The investors generally take 6 months time in this. They pretend investing. They basically keep a track on how much every stock goes up or down and makes decision on when to sell or buy the stock. After completion of 6 months, the above-mentioned advice may lead you to gain profits than losses. In such cases, it's best to stick with this advice.

While learning the penny stock strategies, the most important thing that you need to know is when to sell the stock—when the stock doubles, hurry to sell at least half of what you have. The value of stock may go triple afterwards, so in that case you already have 50% of stocks left with you. You can sell them at a high rate. However, if the value doesn't triple and falls twenty-five percent from its most recent high sell, don't worry! In such a case, you have only lost half as much as you would have if you'd held onto penny stock investing the full time. This important advice along with other penny stock tips may be helpful.

Here are some advantages of penny stock investing:

•   It has a low per share cost.
•   Investors can purchase larger shares in an organization/company.
•   Penny stocks may sometimes return high profit margins to lucky investors.

Now, let us have a look at the disadvantages of investing in penny stocks:

•   Although there are many unidentified winners in penny stock market but investors are aware of the risk factor associated with investing in penny stocks.
•   Shares that increase in value by large percentage may generate smaller profits, if you don't have large percentage of shares.
•   Penny stocks may be ignored for several reasons. For example, if the company is not so big, if there is not enough cash flow etc.

Penny Stock Market For Dummies

2011-11-19T23:52:00.000+00:00

Sam Chim

The penny stock market consists of stocks that are traded for less than five dollars. To pick a winner you need to find stock that is above one cent. If you see that there are stocks for less than a cent, you shouldn't invest. In the penny stock market, any thing less than a penny isn't worth investing. You will never gain anything from a stock under a penny. With the penny stock market, there are risks like any other stock market. In fact, it is just like the regular stock market except you buy stocks for much less. That's why you should treat the penny stock market like any other investment.

When you are planning on investing in the penny stock market you will want to know how to invest. First you need to open an account for your broker. Then you will need to find a financial adviser. A financial adviser will tell you what to invest in the penny stock market and what stocks you should avoid in the penny stock market. They will budget, record, and plan all your investments. Even with a financial adviser, you will need to do your own research in the penny stock market. You need to know every thing about the company and the stock that you are purchasing. With proper investing, you should be able to benefit from quick gains from the penny stock market.

The only way to be successful with the penny stock market is to know what companies to invest in through research. Research is key to any investment. The penny stock market can give you a good investment and some money, but you need to know when to sale and when to buy. You need to realize when you are in a risk. This could take years. The penny stock market, like any stock market is very tricky. It's more of trial and error than anything. That's why you need to have trusted advisers and know where to get the good research on your penny stock.

Like other stock markets, the penny stock market is a pit of schemes. One way to know for sure that you are playing into a scam is when they begin to push the stock too much. When they start encouraging you to buy cheap penny stock at large quantities, there is something up. They are noted for being one of the many get rich quick schemes. First, there is not way to get rich quick, especially when it comes to the penny stock market. The only way that you can gain a real investment is if the stock becomes to be bigger or worth way more than you bought. Don't get distracted by the investment or the broker.

Stock Investing For Dummies ( cd 1) part 3

2011-11-19T23:36:00.001+00:00

Stock Investing For Dummies ( cd 1) part 2

2011-11-19T23:35:00.000+00:00

Stock Investing For Dummies ( cd 1) part 1

2011-11-19T23:33:00.000+00:00

Stock Investment Tips : How to Buy Stocks Without a Broker

2011-11-19T23:30:00.001+00:00

Stock Investment Tips : How to lnvest in Penny Stock

2011-11-19T23:28:00.001+00:00

Warren Buffett Interview on How to Read Stocks

2011-11-19T23:26:00.000+00:00

Hot Penny Stocks - A Beginner's Guide to Making Profits

2011-11-19T23:10:00.000+00:00

By C. Limpert

If you are planning to invest in hot penny stocks then you need to buy the shares which can give you a significant profit margin quickly. Penny trading is considered very risky for the investment but at the same time it can be a very profitable investment if you play your cards right.

Generally the companies who are very new to the market offer these types of shares for the investors. The prices are generally below $5 and the market cap for these companies are usually below $200 million. If you really know how to invest wisely then you can become a very profitable trader by trading the best penny stocks. Read further to discover how to select the most profitable picks and manage your chances of loss.

Ability to select good stocks: Hot penny shares are the ones which are rapidly rising in terms of prices in the market at any given time. These shares are highly volatile in nature. This simply means that the base price for these shares can quickly go either up or down depending upon the market trends. You need to know which are the best penny picks at that particular time and you need to be able to weed out the losers.

The way to profit with these hot penny stocks is to buy low in the beginning and sell high when the shares are on the rise. Here are some tips to help you find profitable penny stock picks:

If you want to play safe in the beginning then you can start with a simple demo account. Select a particular company shares which has profit potential. Play with it for at least 2-3 months and watch the price changes for that particular company stocks. By keeping continuous watch on a particular stock, you will realize whether it is a profitable share or not. Then you can begin your actual investment.

One more simple idea to make reasonable profits from penny trading is to sell 50% shares when their price is doubled and sell other 50% when the price drops by 25% of its recent high price. This way you can definitely save yourself from a potential loss.

Tracking these investments is not easy as these companies are not typically covered well in the news. To assist in your identification efforts, sign up to free newsletters that provide penny stock alerts to narrow down the population of hot penny stocks for you to follow.

Do you want to get hot penny stocks sent to you for FREE? CLICK HERE To Get Start Receiving Free Penny Stock Alerts!

What is a Penny Stock?

2011-11-19T23:00:00.000+00:00

By JEFF ROSE

http://www.goodfinancialcents.com

Being employed in the securities industry has its fair share of unique and challenging situations. One situation that I always find comical is when a client calls me and wants to buy some obscure penny stock that they claim is the next “sure thing”. Each time this occurs, it never fails that the stock is some random recommendation from the client’s brother’s barber’s son-in-law who guarantees the stock is getting ready to take off. Every time this occurs I always sigh to myself and think, “Sure it is”. Before you go out and try to strike gold let’s find out what a penny stock really is and what risks they have.

Pennies on the Dollars

One would think that a penny stock would cost only pennies, right? Well, not quite. Actually, to qualify as a “penny stock”, the stock price will be less than $5.00. Here are a few other characteristics of a penny stock:

They are not traded on any exchange or the Nasdaq
Priced less than $5.00
Company has not met financial standards of listed equity companies.

Why Are Penny Stocks Risky?

Many investors are attracted to penny stocks because of the buying power (you can buy lots of shares without a lot of money) and “potential” payoff. Keyword is “potential” or better translated as “not likely“. What makes penny stocks so risky is there lack of liquidity. Penny stocks are not traded on the major exchanges (NYSE or Nasdaq) and are traded on Over the Counter Bulletin Board (OTCBB) or the Pink Sheets. The listing requirements of these are far less stringent than the major exchanges, so many of these companies do not have to have as detailed reporting as their publicly traded counterparts. All these factors combined are what make penny stocks that much more risky.

Liquidity is an Issue

Since these stock are more thinly traded, it can be hard to find a buyer if you hold the stock. And just because the stock may list for a certain price, doesn’t mean that there is a buyer out there. Think trying to sell a Barry Bonds rookie card for what the pricing guide lists it for. Chances are you are not going to find a buyer.

Beware of Penny Stock Scams

Many of us have been exposed to some sort of scam promoting penny stocks. According to a study conducted at Oxford, 15% of all e-mail spam was related to penny stock fraud. According to the study,

“People who responded to the ‘pump and dump’ scam lost 8% of their investment in two days. Conversely, the spammers who buy low-priced stock before sending the e-mails, typically see a return of between 4.9% and 6% when they sell.”

The most common penny stock fraud is the “Pump and Dump“. A small group of speculators will accumulate a large number of shares in a penny stock. Once their positions are in place, they will release positive financial propaganda, news so unexpected and titillating it can drastically affect people’s perception of the stock. The intent is to get small-time investors to start trading irrationally. The news is almost always false, but before this is discovered, the price of the stock often skyrockets and the original speculators exit with large profits.

Over the years, I have received countless solicitations at work from cold calling Boiler Room types trying to get me to take a look at a hot stock so that I would call my clients about it. It never failed that this next supposed gold mine was some thinly traded penny stock that was going anywhere but up.

Here is a sample email I just received trying to convince me to buy the next hot stock. FYI, I changed the symbol to protect you from rushing off and buying it.

Oil & Gas Junior Exploration Allert!?February, 2010
ABCD Energy Corp.
Siymbol: ABCD
Traading: $0.32
ABCD Energy Corp. is an Oil & Gas Exploration and Development Company
based in Denver,CO with a focus on Wyoming. Using a geology-based methodology,
the US Geological Survey estimate a mean of 2.4 trillion cubic feet of
undiscovered natural gasand a mean of 41 million barrels of undiscovered
oil in the Wind RiverBasin Province of Wyoming. ABCD Energy Corp. has
acquired 75% working interest in the Diamond Springs Prospect located within
this prolific area. The Company’s shaares are publicly traaded on the OTCBB
under the tiicker siymbol ABCD.
Get in before word hits the street!

Another example of a scam that I and another blogger Mrs. Micah both experienced was receiving a fax at work involving penny stocks. The fax is made to somebody else’s attention and you are led to believe by the scammers that you have been on the receiving end of inside information by mistake. They are hoping that you will go out and buy the stock and tell all your friends to buy it, too. If you get a similar fax at work, don’t call your stock broker about buying it. Head to the shredder and save yourself the trouble and money.

This post is editor’s pick at the Carnival of Personal Finance.

How to Invest and Make Money in Penny Stocks

2011-11-19T22:45:00.000+00:00

By Hubert Lee

OK so you've heard about penny stocks and how the returns can be staggering. However, investing, especially penny stock investing, is NOT a get rich quick scheme. This is real business that some of the world's richest and most powerful people use every day to earn a fortune.

So what exactly are Penny Stocks and how can you make money trading them?

Penny stocks are those priced at $5 per share or lower, not issued by an investment advisor such as a closed-end fund, and not listed on a national exchange. They are usually issued by smaller companies, which get little or no analyst attention or other market notice. Penny stocks are those stocks that are price under $5. Many people think that penny stocks are micro caps with capitalization of less than $250 million and this means that they are capable of creating wealth. Penny Stocks are stocks that usually trade below $5 per share. Sometimes these stocks are sold for just a fraction of a cent.

Penny stocks are extremely cheap to purchase and they have a small chance of delivering an extremely high return on investment. But, more than likely, penny stocks simply are a high risk investment gamble in which you lose money. Penny stocks are speculative securities of very small companies, priced below $5, and generally trade over-the-counter, such as on the OTC Bulletin Board or in the Pink Sheets. Penny stocks may also trade on securities exchanges, including foreign securities exchanges. Penny stocks are very low in price which gives the small investor the opportunity to participate in them. A penny stock offers more leverage than a high-priced stock if things went right.

Penny Stocks are named that way for a reason. While each one of us starts dreaming about investing in the next big thing, the thing is our chances are slim on finding such a success story. Penny stocks are the fast movers of the stock market. While large stocks such as IBM and Microsoft lumber along like the giants that they are, penny stocks often race around like Ferraris. Penny stocks are usually traded on the OTCBB or on the Pink Sheets. The OTCBB (OTC Bulletin Board) is an electronic quotation system for over-the-counter securities that are not listed with one of the national stock exchanges.

Investing in penny stocks is risky just like any stock market investment. But due to the small startup investment, and enormous earning potential if you hit the big time . Investing in penny stocks is speculative business and involves a high degree of risk. Often, brokers will enhance the new account card to make it seem that you are suitable for a penny stock investment when you are not.