Are you looking for your entry into trading in the stock market? Penny stocks are a great way to get started. Trading always comes with risks, but the cost to play in penny stocks is perfect for new investors. Let’s get into what penny stocks are, and where to find the best penny stocks.
What are Penny Stocks?
Penny stocks, commonly referred to as “pink sheet stocks” are company shares that are traded for under $5 dollars. On average, penny stocks will be sold over-the-counter (OTC). They tend not to be traded in the Major exchanges, but every now and then when a penny stock is able to maintain a value of $1 to $5 a share, it just might get on the New York Stock Exchange.
Penny stocks are great as an affordable way to get involved in the stock market when you have a small amount of capital to invest. Penny stocks are perfect for people who want to practice in the stock market. Once you learn, you can make some pretty nice profit along the way.
How Do I Buy Penny Stocks?
Purchasing penny stocks can be done through your average stockbroker. The only difference is that penny stocks typically aren’t listed on NASDAQ and NYSE, penny stocks get listed on the Over-the-Counter Bulletin Board (OTCBB) or Pink Sheets.
The OTCBB is typically considered the safer avenue to go with when looking to buy penny stocks. The OTCBB has listing requirements that set a standard for what stocks can be traded. Pink Sheets is only a quotation publisher. They are not registered with the U.S, Securities and Exchange Commission (SEC). It’s important to note that because Pink Sheets are not registered with the SEC, it takes a bit more research to make a sound investment.
Are Penny Stocks Worth it?
They certainly are. Penny stocks are a really good way to learn the market. When you do your research and practice, you should start to see good returns on your investments. The more you practice and follow the market the better your chance of creating a nice nest egg for your future.
A great way to start practicing is by using a stock market simulator. You can start making trades in the real-world marketplace, without using your own capital. Using a simulator will help you get practice and will let you see first hand if you are making the proper investments. This practice is known commonly as Paper Trading, and can really help when you are new to the market.
Where can I Find the Best Penny Stocks?
When looking for the best penny stocks, Raging Bull is a great website that helps with your research. They have a list of their projections of penny stocks, and plenty of training tools to help get you on your way to becoming a great trader. If you want to know where to find the best penny stocks, I suggest you check them out.