All About Penny Stocks
What are penny stocks? These types of stock are valued at less than a $1, and in most cases are literally a few cents. Most commonly used terms for penny stocks are micro cap and nano cap, whereas, common markets use small and large cap as it describes the amount of money a company has. For small cap stocks, the value is significantly less as they build their capital, so information is a bit harder to find. Utilizing penny stock websites that offer information about all types of companies and their stocks is really helpful in building your portfolio.
When investing in small cap stocks it’s important to learn as much as possible about a company and track historical price movement of the stock. Some key things to look at are a company’s share of the market, performance and history of profitability. Review investor information packets, and what expansion forecasts they are communicating to the public.
Once you’ve done your research and are ready to jump into the small cap stock market, make sure to protect your investments with a limit order. This limits the trade price from the amount you’ll pay for the stock and your selling price. A great resource for penny stock trading is the OTCCB, which is the Over the Counter Bulletin Board website and often has information about different stocks.
Overall, if you follow these steps, you’ll establish yourself as a diligent micro-cap investor with a strong portfolio. The fact that you don’t have to risk a heap of money also makes them a lot of fun to trade.
Good Luck & Happy Trading!
-Penny Stock Rumble
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Penny Stocks Risk and Reward