What are Penny Stocks?

What are Penny Stocks

Penny stocks are low-priced and small capital stocks. These stocks are sold under $5 and traded under pink sheets or OTCBB. Individual investors can have micro stocks marketing from media and press coverage. The gains and losses can be impressively shared and micro stock world gives an opportunity to trade with different options.

You will never hear about penny stocks on TV channels as major stock exchanges don’t cover them. There are many nano stocks having actual presence in the market, but are not sold on social platforms for the reason of having no particular history. Some small cap stocks have a good reputation and are technically strong in background. The trader who can do right technical analysis can perform better for these penny stocks.

What are Penny Stocks

You may think about purchasing penny stocks through regular stock brokers. There are many recommendations floated by broking agencies and they charge cheap commissions for the stocks traded. The cheap stocks listed on small cap markets might not be actually involved on major stock exchanges for the reason of not offering volatile solutions. Penny stocks have differently listed requirements and are not reliable. Micro stocks are listed on Pink Sheets and OTCBB.

There are different requirements for the penny stock trading and pink sheets consist of a system provided to investors with information quotes for the registered stocks. There are lesser legal bounds with OTCBB and it provides less enforcement of listing requirements. The market is full of scammers and you have to make sure that these pump and dump schemes are recognized beforehand.

Investors can put their money in nano stocks for better scope. There are many press releases, articles, forums and newsletters designed to convince people about penny stocks. You can find success stories from investors who have played in pennies. It is not necessary that the information on these platforms is always right. Penny stocks can give you results only if you choose the best ones.