| Penny stocks are stocks that trade for $5 or less on | | | | Since these companies trade on small volume and |
| the Over the Counter Bulletin Board (OTC-BB) and | | | | don’t typically have millions of dollars of shares |
| Pink Sheets. The major advantages of penny stocks | | | | traded in a day, when investors start to buy them |
| are their low costs, easy accessibility for everyone, | | | | the price can rise extremely rapidly. The lower the |
| and enormous profits. Penny stocks are referred to | | | | average trading volume of a stock, the faster it can |
| as those stocks that are not operated on any of the | | | | make gains. |
| major exchanges (AMEX, NASDAQ, NYSE). They are | | | | The most important thing is to find the right penny |
| economical, speculative securities from small | | | | stocks to trade. |
| companies generally traded through an "over the | | | | Penny stocks picks are exclusively selected |
| counter" listing service, such as (OTCBB or Pink | | | | investments generally picked by investing experts |
| Sheets) The novice investor may come across | | | | who recognize penny stocks that seem ready to |
| additional terms used which are identical with penny | | | | explode in value. These specially selected stocks are |
| stock like,: microcap stocks, nano caps and small | | | | chosen after the companies have been cautiously |
| caps. | | | | explored and evaluated. |
| The OTC BB (OTC Bulletin Board) is a regulated | | | | There are many online stock analysts who put |
| quotation service in the U.S.A. owned by the NASD, | | | | forward recommendations on these stocks. A lot of |
| for stocks that are not listed on any of the major | | | | them have launched newsletters and penny stock |
| U.S. stock exchanges. These stocks are always less | | | | alert services to keep their subscribers updated with |
| than $5 per share, and usually less than $1. The | | | | the most recent news and trading opportunities. |
| lower the share price, the more volatile they are. | | | | These special newsletters offer penny stock picks |
| A stock that is 1 cent can often make gains of | | | | and suggestions, as well as instructions and guidance |
| 100-300% or more in a single day. The ones with | | | | on how to obtain good penny stocks online. For most |
| higher share prices trade more like NYSE stocks, | | | | investors and traders, this sort of information can |
| slower and more steadily. However, a gain of | | | | make penny stock trading your primary source of |
| 20-50% in a single day is still common for a stock | | | | income. Many traders earn over $1 million per year. |
| that trades over $1. | | | | |