Penny stocks - a sexy proposition

A penny stock is a regular stock that trades for less than $5 a share

. Although penny stocks are usually quoted over-the-counter, such as on the OTC Bulletin Board or the Pink Sheets, they can also be traded on securities exchanges like the NASDAQ and AMEX. Penny stocks are for a certain kind of investor, the kind who is looking to make big gains in short periods of time.

A hot penny stock is fundamentally a stock that quickly makes huge gains in price, due to lots of investors rushing in at once to try and buy shares. There are lots of things that can make a penny stock get hot. Sometimes it can be a bit of good news, sometimes it can be due to lots of hype from brokers or internet promoters. Either way, there can be a lot of profits made by investing.

For the investor that is new to trading penny stocks, there is an important strategy to keep in mind. If you follow basic trading principles, you can make more money with penny stocks than ANY other form of investing. More than large cap stocks, more than options, even more than commodities. The key is to remember that penny stocks are just as volatile as options and commodities. Therefore, cash in some profits while you can. A 300% gain can turn into a 100% gain very quickly if you get too greedy and don't cash in your profits.

Hot Penny stocks can be a little complicated to pick because the mainstream media doesn't cover penny stocks. However, fortunately you can get very high quality penny stock picks from free email newsletters that send out something called penny stock alerts. These newsletters supply you with the information you need and usually are very good at picking stocks at the exact right time.

Hot penny stock picks are often discussed on stock trading message boards and online stock communities. You can find a lot of good stuff there, but a lot of the stuff you find is just people trying to manipulate the perception of a stock for their own reasons. That's why I like newsletters much better to find the best penny stock picks.

Dealing in penny stocks can be very rewarding. They can put the big stocks, options, and even commodities to shame with their quick and large gains.

Penny stocks - a sexy proposition

By: Ryan Williams

POST COMMENT

Binary Options Trading Platform How To Build Your Trading System Overseas Trading Can Be Easy - There Are Numerous Benefits Of International Trading Derivative Trading: Betting on the Spreads Day Trading For Dummies How CFD Trading Can Help You Hedge Taking Advantage Of CFD Trading How To Hedge Using CFD Trading ETF Trend Trading: How to Consistently Beat the Pants of the S&P Average Every Day How Knowing the 4 RSI Trading Signals Will Elevate Your Trading Level Skill Day Trading For Dummies Pdf Day Trading For Dummies Amazon Stocks Investment - How to Make Your Million Dollars from Small Cap Stocks!