| If you are a first time investor penny stocks can be | | | | of around $50 to $300 million is termed a micro cap, |
| alluring as well as dangerous. It only takes a few | | | | and less the $50 is a nano |
| hours for these types of stocks to shoot up 100% | | | | According to the SEC stock under five dollars is |
| and as the investors watch, their investments can all | | | | considered a penny stock. Some traders cut off |
| of a sudden spiral down the drain. But those that | | | | point is at $3, and others cut off point is less than $1. |
| have been trading and know the tricks of investing | | | | However, anything trading over the counter or on |
| can avoid losing their money. | | | | the pink sheets is a penny stock. These types of |
| There are various scammers that literally just pump | | | | stocks are far riskier than your normal stocks. |
| and dump stocks, so you have to know how to | | | | There are many factors that make penny stocks |
| avoid losing and know how to pull triple digit gains | | | | riskier and the major factor is the lack of information |
| legally and safely. When it comes to trading | | | | available to the public. The key to any successful |
| successful companies are made, and they have | | | | investment is acquiring sound information in order to |
| worked their way from the bottom to the top of | | | | make sound decisions. Any company that lists itself |
| the rank. However, there are investors that forge | | | | on the pink sheets are not regulated to file with the |
| through stocks in hope of finding the next big | | | | exchange commission or securities, and due to this |
| Wal-Mart or similar. | | | | fact are not publicly regulated as stock |
| Sadly this type of strategy in most instances proves | | | | representatives on the NY stock exchange. |
| to be unsuccessful. And having high hopes on these | | | | The information that is available on penny stocks and |
| types of stocks could make you lose your entire | | | | micro caps is not credible. Stocks on the pink sheets |
| wealth. Micro cap stocks and penny stocks are | | | | do not have any standard requirements in order to |
| interchangeably used and micro caps are based on | | | | remain on the stock exchange. Is a company can no |
| their market capitalization, whereas penny stocks are | | | | longer hold its position on the major board, they then |
| based on their price. Stocks vary with a capitalization | | | | drop to one of the smaller exchanges. |