Posts Tagged ‘stock exchange’
The Difference Between Penny Stocks and Small-Cap Stocks
Written by troy on Wednesday, April 08, 2009 | No Comments
Categories: Uncategorized Tags: penny stock, penny stocks, Pink Sheets, stock exchange
The SEC defines a penny stock as a security that is low priced and speculative that is traded in places such as the OTCBB and Pink Sheets. Its not so important if a stock is traded on a major exchange or not since what really makes a penny stock what it is, is the price and not necessarily the exchange which it is traded on. Its anybodys interpretation what exactly is a penny stock since there is no standard figure. Its generally accepted that its anything trading under a dollar. Go figure right. The biggest money to be made in these stocks is in conjunction with any news released about the stock since penny stocks are quite sensitive. Because they are so sensitive, small investors have the advantage.
There is a right way and a wrong way to play these cheap stocks. The thing to keep in mind is that any movement in the stock in general is amplified exponentially in penny stocks. So if the market goes up then penny stocks go up even more. If the market is down then penny stocks are way down. This is a generalization of course but an accurate one. Trading of penny stocks is influenced by the market demand in the OTC rather than the traditional stock exchange processes.
Penny stocks are bought and sold at a number of different prices. This is definitely different than normal trading prices you may be used to. This can become a headache to keep up with if you are doing some online trading and trying to buy and sell at just the right time. That is why its always a good idea to set limits so that you dont unwittingly get burned during a transaction that was in process while prices were changing.
Penny stocks are not always as transparent as small caps are. Penny stocks do not have to abide by SEC reporting rules and so the frequency of financial statements may be erratic or nonexistent. Sometimes it seems the only thing that penny stocks are releasing is press releases to generate some stock market excitement.
The purpose of this article was not to turn you off of investing in penny stocks but simply to highlight the differences in trading and level of risk. Penny stocks will continue to present some exciting investment opportunities and attract those with a high risk tolerance. As always never invest more than you can lose and diversify your portfolio.
By: Scott Johns
About the Author:
There is a right way and a wrong way to play these cheap stocks. The thing to keep in mind is that any movement in the stock in general is amplified exponentially in penny stocks. So if the market goes up then penny stocks go up even more. If the market is down then penny stocks are way down. This is a generalization of course but an accurate one. Trading of penny stocks is influenced by the market demand in the OTC rather than the traditional stock exchange processes.
Penny stocks are bought and sold at a number of different prices. This is definitely different than normal trading prices you may be used to. This can become a headache to keep up with if you are doing some online trading and trying to buy and sell at just the right time. That is why its always a good idea to set limits so that you dont unwittingly get burned during a transaction that was in process while prices were changing.
Penny stocks are not always as transparent as small caps are. Penny stocks do not have to abide by SEC reporting rules and so the frequency of financial statements may be erratic or nonexistent. Sometimes it seems the only thing that penny stocks are releasing is press releases to generate some stock market excitement.
The purpose of this article was not to turn you off of investing in penny stocks but simply to highlight the differences in trading and level of risk. Penny stocks will continue to present some exciting investment opportunities and attract those with a high risk tolerance. As always never invest more than you can lose and diversify your portfolio.
By: Scott Johns
About the Author:
Scott Johns conducts research and analysis of stock market picks for a penny stock analysis company. To check out some of his company’s latest picks go to Best Penny Stocks and Picks
Option Stock Trading How To Trade Stock Options The Easy Way
Written by troy on Wednesday, March 18, 2009 | 1 Comment
Categories: Uncategorized Tags: Invest, penny stocks, stock exchange, Stock Trade, Stock Trading, Trading Options
numerous different stock options possible, it\\\’s nearly inconceivable to keep current with your options. When investors want to begin small in the stock exchange, they might discover that penny stocks are a good investment funds – but, are they? It is quite true that, for those investors wanting only to put in a tiny bit of their money, these stocks or shares are a respectable way to go. Shares are regularly purchased reasonably cheaply, so there is the hope of acquiring a substantial return for that small initial investment, and this is the reason why some speculators are attracted to penny stocks, because it sounds perfect, right?
But this does not necessarily mean that it is always a secure idea to invest in penny stocks. Yes, there is some possibility to savor a large return but they are not judged a \\\’risky investment for nothing. There is also the potential that investors will lose all their funds, their complete investment in fact – but why? Primarily because penny stocks trade very infrequently, and they don\\\’t deal via the huge and familiar stock exchange systems, making it tough to buy and sell them. When a stock is tough to sell, that often means that investors could get lumbered with their shares – and that\\\’s a place that many don\\\’t wish to be in which the reason why penny stocks are risky.
While some speculators may view this kind of dealing exhilarating, it puts others off from these shares completely. So how do you recognize when it\\\’s a good idea to invest because actually, the only person who can determine how to invest your funds is yourself. When you save in penny stocks, you have frequent “progress reports,” so you are aware precisely how your investment is doing. This is a national law, so if you save and do not get your accounts then something is very seriously amiss with your investment. You need to get frequent updates relating to your investment funds, because if you save in penny stocks you will wish to observe them carefully. It\\\’s because they trade so infrequently, investors in penny stocks have to be ready to make a move quickly and missing the window of opportunity could mean missing out on a large pay off.
If you enjoy the chance and wish to take that gamble on a large return by setting up just a small initial investment funds, then penny stocks may be the correct choice for you. There are numerous Internet scams to do with penny stocks, and a good many individuals regularly experience spam e-mails on these and other sorts of investment. These particular spam emails are trying to shaft you out of your money, so don\\\’t trust the penny stocks you see publicized here. Nevertheless, there are some entirely legitimate penny stocks that investors may want to try, yet, so do not let spamming stop you. If you feel comfortable with your chances and like what you hear regarding penny stocks, then it\\\’s a worthwhile thought for you to invest.
Remember, you\\\’re the only one who can make that decision, but if you like the idea of penny stocks, then find out more.All the same, if you don\\\’t want to take the risk, then you might not wish to chance the stock market period!
By: pdopes
About the Author:
But this does not necessarily mean that it is always a secure idea to invest in penny stocks. Yes, there is some possibility to savor a large return but they are not judged a \\\’risky investment for nothing. There is also the potential that investors will lose all their funds, their complete investment in fact – but why? Primarily because penny stocks trade very infrequently, and they don\\\’t deal via the huge and familiar stock exchange systems, making it tough to buy and sell them. When a stock is tough to sell, that often means that investors could get lumbered with their shares – and that\\\’s a place that many don\\\’t wish to be in which the reason why penny stocks are risky.
While some speculators may view this kind of dealing exhilarating, it puts others off from these shares completely. So how do you recognize when it\\\’s a good idea to invest because actually, the only person who can determine how to invest your funds is yourself. When you save in penny stocks, you have frequent “progress reports,” so you are aware precisely how your investment is doing. This is a national law, so if you save and do not get your accounts then something is very seriously amiss with your investment. You need to get frequent updates relating to your investment funds, because if you save in penny stocks you will wish to observe them carefully. It\\\’s because they trade so infrequently, investors in penny stocks have to be ready to make a move quickly and missing the window of opportunity could mean missing out on a large pay off.
If you enjoy the chance and wish to take that gamble on a large return by setting up just a small initial investment funds, then penny stocks may be the correct choice for you. There are numerous Internet scams to do with penny stocks, and a good many individuals regularly experience spam e-mails on these and other sorts of investment. These particular spam emails are trying to shaft you out of your money, so don\\\’t trust the penny stocks you see publicized here. Nevertheless, there are some entirely legitimate penny stocks that investors may want to try, yet, so do not let spamming stop you. If you feel comfortable with your chances and like what you hear regarding penny stocks, then it\\\’s a worthwhile thought for you to invest.
Remember, you\\\’re the only one who can make that decision, but if you like the idea of penny stocks, then find out more.All the same, if you don\\\’t want to take the risk, then you might not wish to chance the stock market period!
By: pdopes
About the Author:
Option Stock Trading Watch Over My Shoulder As I Make Over $6000 Live On Video. Learn How To Trade Stock Options Today.