| If you are looking to learn how to buy over the | | | | important to realise that the vast majority of penny |
| counter stocks then chances are you are interested | | | | stocks are charged by brokers as a simple, principal |
| in the penny stock market. Penny stocks are not | | | | transaction. This means that the broker does not |
| traded on the stock exchange like conventional | | | | charge any commission on the trade and instead, |
| stocks, they are traded in the over the counter or | | | | make their money on the spread and also from |
| OTC market. The trading of such stock an agent will | | | | buying and selling at good times. |
| act on behalf of the investor to arrange a transaction | | | | When learning how to buy over the counter stocks |
| between the investor and a third party, the broker | | | | and, more specifically penny stocks it is important to |
| receives a commission for his part in the deal. | | | | know that there is no set price at which penny |
| There is no specific definition for a penny stock but | | | | stocks are bought and sold. Instead there are a |
| the general way to classify what makes a penny | | | | number of different prices. The spread of most |
| stock is a stock that trades at under $5. Penny | | | | penny stocks tends to be around 25-33% or so but |
| stocks may also be known as a nano or micro stock. | | | | has been known to go as high as 50 to even 100%. |
| For a broader definition of a penny stock we can say | | | | In addition to this there are always two bid and two |
| that the penny stock refers to a businesses | | | | ask prices, these are known as the inside bid, outside |
| aggregate value of the outstanding common shares | | | | bid, inside ask, and outside ask. The outside bid and |
| and are more commonly known as the shares | | | | outside ask are the numbers that are of most |
| market cap rather than the stock price. | | | | importance. |
| To be able to work out the market cap of a | | | | When learning how to buy over the counter stocks it |
| company you must first multiply the companies | | | | can seem quite complicated at first and with penny |
| current stock price by the number of shares that are | | | | stocks the losses are often vast. However, many |
| currently outstanding. This calculation will give you the | | | | investors trade in them every day. It makes good |
| total dollar value of all the shares in the company at | | | | sense to consult with your broker on what stocks |
| any given time. | | | | are the best investment, but please do try to be |
| This is all important information for people who are | | | | wary of brokerages who may not have your best |
| learning how to buy over the counter stocks. It is | | | | interests in mind. |