Stock Markets Exposed

penny stock?

I have been researching on the best ways to invest some money but, I have not heard anything about a penny stock 'till i started reading the answers to others questions. What are they?

Public Comments

1. In the U.S. financial markets, the term penny stock commonly refers to any stock trading outside one of the major exchanges (NYSE, NASDAQ, or AMEX), and is often considered pejorative. However, the official SEC definition[1] of a penny stock is a low-priced, speculative security of a very small company, regardless of market capitalization or whether it trades on a securitized exchange (like NYSE or NASDAQ) or an "over the counter" listing service, such as the OTCBB or Pink Sheets. The terms penny stocks, microcap stocks, small caps, and nano caps are also all sometimes used interchangeably, however per the SEC definition, penny stock status is determined by share price, not market capitalization or listing service. Many new investors are lured to the appeal of penny stocks due to the low price and potential for rapid growth which may be as high as several hundred dollars in a few days. Similarly, severe loss can occur and many penny stocks lose all of their value in the long term. Accordingly, the SEC warns that penny stocks are high risk investments and new investors should be aware of the risks involved. These risks include limited liquidity, lack of financial reporting, and fraud.
2. Super cheap stocks. Usually worthless. Highly speculative. Probably a pretty bad idea, if you're looking to make money. don't buy any stocks until you've read the BALANCE SHEETS for the companies, and know how much each share of stock is actually WORTH (note - worth is NOT the same as "selling price".)
3. Penny stocks are new offerings as a rule. And not to be wise, but this might be a wise time to keep your money in the piggy bank, or maybe under a matress.
4. they are stocks for penny a share. usually high risk but once i did earn about 5 K in a week on one that I heard about from work. it was nice. you can use scot trade , and do the buy / sell online by yourself for very little fees. this is the only one i've ever made money on. you could talk to a stock broker / invester and ask for information and to help you with investment advice but those guys usually get more fees.
5. They are a big no-no, in my opinion. They are considered to be very high risk investment. Basically, penny stock is a low-priced, speculative security of a very small company. It is very difficult to sell them once you own them because they trade infrequently, plus it is very hard to find dependable quotations for them because they may be hard to price. Refer to the SEC definitions and warnings on penny stocks/
6. Certified garbage stay away from them.
7. Here is everything you need to know about them. STAY THE HELL AWAY FROM THEM! They are stocks that cost only pennies per share. They are "cheap" for a reason - they are no good! You COULD get lucky and pick one that will rise dramatically but it's like about a one in a million chance! Don't try! Even the EXPERTS can't pick 'em!!