So You Wish To Make Extra Money With Penny Stocks
Inexpensive penny stocks can be an attractive form of investing for the newbie trader. Low prices make it possible to trade many shares and this can make one big money in a short amount of time. That seems like a great way to make a living but it is not without pitfalls, and it is best to know a few things before you start.
The newbie who wants to know how to trade penny stocks effectively must look at all the possible risks. These securities are not hard to manipulate, due to the lack of regulations and cheap prices. The slightest bit of bad or good news can have a huge effect on prices and it does not take much money, so anyone can create a stir.
The money you spend on cheap securities will not have much protection. Major corporations issue stock that is regulated by a number of rules and regulations. Your penny stock picks may have almost no regulation. Pink Sheets or the OTCBB (Over-the-Counter Bulletin Board) can be used for most picks.
Pink Sheets is the name of the publication from the National Quotation Bureau and it lists a large variety of over-the-counter (OTC) securities. Over-the-counter simply means that a stock is not listed with a major exchange. The name "Pink Sheet" comes from the color of paper that the publication was originally printed on. Also, not all OTC securities are Pink Sheets. This kind of stock has very little regulation and companies are not required by law to file reports with the Securities Exchange Commission or SEC.
The OTCBB or Over-the-Counter Bulletin Board and Pink Sheets are separate entities. They are both quotation services yet the OTCBB is more stringent on its requirements and its companies provide regular reports to the SEC. Also, the OTCBB is run by NASDAQ. You can find a lot of helpful info at their website but only qualified brokers may buy and sell.
It is always best to research any penny stock investing opportunity completely before you buy. You can go to the SEC website to check out a company. You also may check out a company's ratings with the OTC Markets website. This service rates companies according to how much information they provide investors.
If you cannot find information on the financial health of a company it should be a red flag. You should not consider investing unless you can find financial statements released by the company, and then you should study them thoroughly. You will find good info at stock resource sites. Some are free while others charge a minimal fee.
You cannot buy or sell OTC stock on your own, as you must use a brokerage. Whether you choose a discount or full service broker is up to you. Remember to research well before buying. This lessens the risk on your investment and maximizes your earning potential. Penny stocks are a good way to make money, but they are a risky venture.
The newbie who wants to know how to trade penny stocks effectively must look at all the possible risks. These securities are not hard to manipulate, due to the lack of regulations and cheap prices. The slightest bit of bad or good news can have a huge effect on prices and it does not take much money, so anyone can create a stir.
The money you spend on cheap securities will not have much protection. Major corporations issue stock that is regulated by a number of rules and regulations. Your penny stock picks may have almost no regulation. Pink Sheets or the OTCBB (Over-the-Counter Bulletin Board) can be used for most picks.
Pink Sheets is the name of the publication from the National Quotation Bureau and it lists a large variety of over-the-counter (OTC) securities. Over-the-counter simply means that a stock is not listed with a major exchange. The name "Pink Sheet" comes from the color of paper that the publication was originally printed on. Also, not all OTC securities are Pink Sheets. This kind of stock has very little regulation and companies are not required by law to file reports with the Securities Exchange Commission or SEC.
The OTCBB or Over-the-Counter Bulletin Board and Pink Sheets are separate entities. They are both quotation services yet the OTCBB is more stringent on its requirements and its companies provide regular reports to the SEC. Also, the OTCBB is run by NASDAQ. You can find a lot of helpful info at their website but only qualified brokers may buy and sell.
It is always best to research any penny stock investing opportunity completely before you buy. You can go to the SEC website to check out a company. You also may check out a company's ratings with the OTC Markets website. This service rates companies according to how much information they provide investors.
If you cannot find information on the financial health of a company it should be a red flag. You should not consider investing unless you can find financial statements released by the company, and then you should study them thoroughly. You will find good info at stock resource sites. Some are free while others charge a minimal fee.
You cannot buy or sell OTC stock on your own, as you must use a brokerage. Whether you choose a discount or full service broker is up to you. Remember to research well before buying. This lessens the risk on your investment and maximizes your earning potential. Penny stocks are a good way to make money, but they are a risky venture.
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