Stocks Trading: The Basics On How To Trade Stocks

Before the economic recession, there was a clear line between what was considered to be a penny stock and what was not

. Today, the only real difference is that the penny stocks are not available through the major indices; but rather are sold over the counter and most likely through your online broker. Buying them is an easy process assuming your broker offers them. However, researching the companies themselves may not be a very simple process at all. In the end though, your goal is to buy low and sell high.

Right now, with the stock markets just beginning to make a recovery from a freefall, many people are contemplating getting in while the values of these shares are low. By a simple technicality, the concept of penny stocks has always been shares of stock that are under $5 per share. Thanks to the recent economic crisis, some Fortune 500 companies could be almost considered as penny shares.

Penny stocks are known for being very unstable and while in a steady market, they may be a great choice for some quick profits, but they will not actually make you rich; well at least not in this market. At the same time, there are several major corporations whose shares are selling just as low. These companies are strong and have held out throughout the recession without failing. Their values will increase once again and now is your chance to pick up as many of the shares as you possibly could.

Could you imagine picking up a thousand shares in a Fortune 500 company today only to see it bloom over the next year and double, triple or even quadruple in value? Sure you can because that is what is happening right now. The markets are recovering and now is the only opportunity you have to pick up some of these shares of stocks at penny stock prices. Of course if you miss out on the opportunity, you can still trade in regular penny stocks; but you will need to have a broker who deals with them. Most of the online brokers will make these penny stocks available to you, but always keep in mind that while there is a high potential for profit associated with them, they are very risky and therefore also offer greater chances for complete losses.

by: Luigi_F

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