Thus microcaps and small caps are the other names of penny stocks. Hence penny stocks are companies trading under 5$. Moreover, penny stocks are companies with smaller market caps generally less than 300M $ (microcaps). Further Nano caps are generally less than 50M $ market cap. So, many penny stocks are listed on NASDAQ and NYSE stock exchange. True penny stocks trade below 1$.
How to Invest in Penny Stocks?
Do your Research:
Hence always try to choose legal stock companies must do little research on the company before investing your money. Moreover, you can check the company by visiting the website of the Securities and Exchange Commission. Thus before investing you must require proper information about everything then do it. Further, you need to understand how investing company makes money. Furthermore, you can search by stock scanner although proper research takes time but rewards you in return.
Selection of Broker:
Thus it is difficult to find a broker in less time. Further, when you choose an online broker he must charge extra money for it make penny stock trading very expensive. Hence always try to find brokers that don’t charge extra surcharges. So, TradeStation and TD Ameritrade are two reliable brokers that do not charge surcharges. Moreover, TradeStation only charges 5$ and TD Ameritrade charge 6.96$ on transaction of one penny stock. TD Ameritrade does not charge surcharge even on large stocks.
Select Stock to Trade:
Hence it is best to you select tools for the trading present on Finviz and OTC Markets websites. Moreover, these tools have much information that is helpful for you to select the stock for trading. You can also check out otcmkts:towtf it is worth investing.
Trading:
Thus a person must prepare their mind with losing investment on some or all of the trade.
Join Day Trading Chat-room:
Moreover, when you join a day trading chat room you will be able to get a lot of useful information regard penny trading from experts. Thus always take a chance and try to be comfortable with mistakes.
Penny Stocks’ List:
Hence below is the list of both gainer and loser penny stocks that are very helpful to you. Thus you can easily select the best penny stock.
Gainers:
Moreover below are the symbols of penny stocks gainers:
- SYPR
- BGI
- CREX
- GALT
- UONEK
- UXIN
Losers:
Thus below are the symbols for penny stock losers:
- AENZ
- THMO
- NOVN
- XYF
- RETO
- AXAS
Why Penny Stocks Risky?
Thus penny stocks are riskier than other stocks. Because it is a very risky decision for the newbie investors. The following factors make it risky:
·No Information:
Hence the first and biggest reason is the lack of information available to the public. Because successful investment is only achieved when you have sufficient appreciable information to make the right decision. Thus it is a very difficult task to find enough information about penny stocks. Moreover, available information is not from authentic resources.
·Reduced Liquidity:
Reduced or less liquidity regarding stocks leads to many issues. Thus when liquidity is reduced it is difficult to find the buyer for penny stock. Moreover, you cannot sell your stocks.
·No History:
Thus it is risky that there is no history of penny stock trade company. Moreover, all the companies for penny stock are new or bankrupt. Hence track road of these bankrupt companies is very bad. Further, it is difficult for an investor to find a stock’s potential without history.
Advantages:
- Moreover, penny stocks are good for small businesses to gain high funding in turn.
- Hence penny stock provides a good method to achieve access to higher marketplace listings.
- Thus if you invest a small amount in penny trading you get a good amount in returns.
Disadvantages:
- The lack of financial information available on penny stock trading makes it unfamiliar.
- Chances of scam and fraud increase in the penny stock.
- It is different from normal trading because lacks liquidity.
Conclusion:
Penny stock trading is on-trend nowadays. Thus it is appealing to most investors. Hence sometimes investors get maximum profit very quickly. Moreover, it varies from general trading. Because penny stock trading is very risky and there is not any history and information present about it. But has the advantage that people can start investing just by 5$ or below. Furthermore, many investors earn more profit in return but there is no authentic evidence for it.
