I’m interested in buying a penny stock but someone said its not traded on a well regulated market. I thought that if the price for a share is listed as $0.016 that meant you can buy as many shares as you want for that price and later whenever you want to sell, you can just sell it. It said on Scottrade that it has to be a “limit” trade which someone told me you have to make an “offer” of say $0.016 and if accepted you get those shares? I didn’t know there was negotiating involved but how does this go when I want to sell out? Am I still able to just sell it back to company at whatever the list value is in the future? After the stock ittself its named OTC OTCQB
You should not be buying/selling Penny Stocks, not because they are not sound investments but rather you do not know what you’re doing.
Before you trade anything is best that one knows what they’re doing, why they’re doing it and how to do it.
All markets are made of a Bid and an ASK – so you have two prices, the Bid is some one willing to pay that much for the stock, the other is the ASK (Offering) some one is offering that stock for sale at that price. The highest BID and the lowest ASK is what is called the current market
If you want to buy you can either put in your BID or you can buy it at the ASK
Since the OTC does not offer many systemic or rules as the listed market, most brokerage firms require that people enter a definite price they are willing to pay for the stock or will accept for the stock (limit order)
If you want to sell, put you order in at the BID price. With penny stocks you may or may not get your order executed. This is the problem with penny stocks, you can always buy them but it is more difficult to sell them. And NO you can not sell them back to the company, the company in most cases was glad to sell them on the IPO and most do not want them back.
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