| Anyone looking to make money by trading may like | | | | all around the globe, where low cost stocks and |
| the idea of penny stocks. They are different from | | | | shares function, in markets that assist their trade. |
| the longer term trading of established companies and | | | | Top penny shares can go on to be massive name, |
| can be risky, but also very good investments for | | | | blue chip stocks, as an organization grows and the |
| intelligent investors. A surprising number of people do | | | | markets they trade on can change, over time. |
| not understand the concept of penny stocks though | | | | As the definitions used are relatively flexible, in lots of |
| and may have an incorrect opinion based on the | | | | circumstances you'll often find that there are some |
| name. | | | | contradictions to be discovered, in the way that |
| Rather than invest your money in penny stocks | | | | these shares are defined. For example, you can have |
| without fully comprehending what you are doing, it is | | | | shares that trade in obscure markets, with high unit |
| important to understand what they are. In this article | | | | costs. Equally it's possible you'll discover corporations |
| we will look at the basics so that you can decide | | | | with high market caps, trading at costs well beneath |
| whether it is worth your time looking into this unique | | | | $5.00 per share. |
| type of trading. | | | | What Markets Trade Penny Stocks? |
| A Definition For Penny Shares | | | | Penny shares may be traded on a wide variety of |
| Penny shares are the well known title, for what's | | | | markets. Within the United States, this could imply |
| more officially referred to as a micro cap equity. In | | | | anything from the NYSE and NASDAQ to the |
| its simplest terms, it's an inexpensive stock, a share | | | | OTC-BB and Pink Sheets. Penny Stocks usually tend |
| which trades at a lower worth than blue chip, high | | | | to be discovered on the OTC-BB and Pink Sheets, |
| cap items. | | | | because the bigger exchanges are inclined to give |
| In the United States the SEC outline a micro cap | | | | attention to greater market cap companies. |
| equity as a share which trades at a unit worth of | | | | Small cap shares are typically found where the laws |
| less than $5.00. This is an official definition, but there | | | | and charges for exchange listing are lower. The Pink |
| are other, looser definitions, which are used by | | | | Sheets have fewer restrictions than the OTC-BB, so |
| traders and penny stock brokers, depending on their | | | | you'll find them in greatest numbers there. You'll |
| place throughout the penny stock market. | | | | discover that some brokers favor not to deal with |
| If you're talking to a broker or investor about penny | | | | the Pink Sheets, however you'll find loads of OTC-BB |
| stocks, they could possibly be speaking about shares | | | | Brokers, with a complete listing of OTC stocks |
| where the value, per unit, is lower than a fraction of | | | | available. |
| a cent. You may also be taking a look at stocks that | | | | This should be enough to get you started but be |
| are traded on more obscure markets, with caps of | | | | aware that trading these shares will take further |
| $25-$50 million, or less, depending on the definition | | | | reading and implementation if you intend to become |
| applied. | | | | an active trader. There can of course be a lot of risk |
| In fact, you don't have to be in the US, to be | | | | involved and you should be following a proven |
| speaking about penny shares, as they have parallels, | | | | system if you hope to make it work. |