| "What are penny stocks?" That's a question that I | | | | considered day traders, this means that they buy a |
| hear a lot from people who are curious about this | | | | penny stock one day and then sell it once it |
| type of stock trading. The answer may vary | | | | surpasses a certain value. This is sometimes achieved |
| according to who you ask, but it's basically any stock | | | | in as little as one day, hence the term 'day trader'. |
| that sells for less than $5.00. Some may say that it | | | | There are also penny stock investors who hold onto |
| has to sell for less than $1.00 to be considered a | | | | their stock for longer periods of time, some for more |
| penny stock, but like I said, that all depends on who | | | | than a year. These investors are typically interested |
| you ask. | | | | in long term gains and have implemented a long term |
| No matter what monetary limit you use to define | | | | investment strategy. |
| penny stocks, they are usually offered by newer | | | | There's also the question of where you can buy |
| companies. This makes the financial information on | | | | penny stocks. There are stock brokers that you can |
| these stocks quite limited, and the company may | | | | use or you can use on online broker and purchase |
| have restricted liquidity so a financial report may not | | | | them online. Many people have been taking |
| be available to prospective investors. | | | | advantage of the online brokers and are reaping the |
| There are also some risks involved with penny | | | | rewards. |
| stocks. They are often inactive and small compared | | | | No matter what monetary value you assign to penny |
| to other stocks in the market. The movement of | | | | stock and what type of investor you want to be, or |
| penny stocks lack predictability and stability, they can | | | | even where you decide to purchase them, if you're |
| swing in price by as much as 50% in one trading day, | | | | willing to take the risks to trade penny stocks then |
| which of course makes them very attractive. | | | | you have the potential to make a lot of money with |
| Most individuals who invest in penny stocks are | | | | a minimal investment. |