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Home Invest in penny stocks
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Written by Administrator   
Thursday, 26 March 2009 03:36

How to invest in penny stocks

In general, when you hear someone say they invest in penny stocks, they are usually referring to any stock with a share price of less than $5.00. You can find these stocks on all three of the exchanges: The NYSE, the NASDAQ, and the AMEX. Although you won't find many below $1.00 on The NYSE and NASDAQ though, as both have minimum bid rules of $1.00 to stay listed.

Many non-exchange penny stocks can be traded over-the-counter through OTCBB (Over The Counter Bulletin Board) or Pink Sheets. This is not part of the three major exchanges (NYSE, NASDAQ or AMEX). In fact, OTC trading is a favorite of many penny stock traders. The OTC is a bit different than the three major US exchanges however, and I will explain this in more detail later.

You many have heard of people doubling or tripling their money in a very short period of time with penny stocks. And this can and does happen. But beware, because you can also lose 50%, 70% or even 100% of your money in penny stocks just as easily. If you decide to invest in or trade penny stocks, just know the risks, and be very careful of which stocks you decide to put your money into!

So what exactly are the risks with penny stocks? Check out the link below to get the basics:

Penny stock risks

Check back later for more detailed information on the risks I discuss in the overview!

Last Updated on Saturday, 28 March 2009 01:59