| If you have been reading up about buying and selling | | | | As you can see, this is a very different type of |
| penny stocks, you may well have heard about short | | | | trading than simply buying penny stocks and hoping |
| selling, or shorting stocks. But what does it mean? | | | | they go up in value. Its promise lies in the fact that |
| For starters, we all know that stocks can go down in | | | | you can still make money even if a particular stock |
| value just as easily as they can go up. And this is | | | | loses value but you need to have experience and |
| where short selling comes in. The idea is that it is still | | | | knowledge to have a hope of making it work for |
| possible to make money if the price of a stock | | | | you. |
| decreases rather than goes up. | | | | The key is to spot those penny stocks that are |
| Some people used to think that this could not occur | | | | inflated in price. You can then short sell them and |
| with penny stocks. But it has been proved otherwise | | | | make a profit as they lose the value they didn't really |
| and many people do now attempt to do it. The best | | | | have in the first place. |
| rule to remember though is to steer clear of shorting | | | | If you are already trading penny stocks you may |
| penny stocks until you are very experienced in | | | | need to look for another broker if you want to |
| dealing with them under normal circumstances. The | | | | practice short selling as well. Not all of them handle |
| more you know about them in general the more | | | | this type of trade, so make sure you find one that |
| chance you have of successfully shorting stocks. | | | | does and find out what their requirements are |
| The biggest difference between this type of trade | | | | regarding having a margin account. This is the account |
| and a normal stock is that with short selling you don't | | | | you will need if you are going to give this type of |
| own the stock you are trading with. You need to | | | | trading a go. |
| look for stocks that are falling in value. You short sell | | | | Remember though that shorting penny stocks is very |
| them and then hopefully buy them for less than you | | | | different from buying and selling them normally. As |
| sold them for. If the stock increases in value rather | | | | always, do your research before trying it. |
| than going down you will lose money as a result. | | | | |