Day trading penny stocks?
I was just given a small amount to play around with penny stocks. I know this is a win-or-lose-everything kind of deal, so for curiosities sake, I’m starting small.
The thing is, I have no idea what kind of research to do for penny stocks. They are all so volatile that there doesn’t seem to be much in the way of analysis. Am I wrong? Is it just blind luck throwing a dart at a board of stocks, buying several thousand shares, then selling the second it jumps?
As a CFA, I would recommend to steer clear of penny stocks. Research is hard to come by, and tends to be very biased (i.e. people “pumping” stocks they own , so they can later sell them). If you had some “inside” (legal, of course) knowledge, or knew the company then I could see buying some shares, otherwise, might as well play the casino. Seriously.