Buy Penny Stocks Online

By Whitney Wright

Do you want to buy penny stocks online? The key to the stock market, is knowledge. Let's begin with, what is a penny stock or a micro cap stock? A penny stock is a stock that has a value of $5 or less through OTC, otherwise known as over the counter and the micro cap stocks trade through pink sheets and/or quotations. In this article, reasons to buy penny stocks are going to be discussed.

Micro cap stocks can be a great investment for an investor, this form of stock buying is usually bought by savvy or experienced investors more so than beginners, although many beginners do in fact purchase them because the low price per share makes them very appealing to an investor. Most individuals like to start out at a low price so that they only lose a small amount of money.

Buying penny stocks can give an investor a very high return, the reason why an investor can come out on top through the purchase of these stocks is because the low price of the stock, with any change of the stock going upwards can either be in the hundreds or thousands of percent in a few days. Say you buy a micro cap stock for $3, then there is a big move on investors buying them or a positive thing happens to the company of the stock you purchased and it shoots up to $6 a share, boom you have doubled your money, in other words in a bullish market you can make a lot of money. For the most part penny stocks can be a large part of an experienced investor's portfolio, but it is not recommended for a new investor to just have micro cap stocks in their portfolio.

Micro cap stocks are considered one of the riskiest investments at the same time as possibly being one of the most profitable investments, the reason being is since they are traded on the OTCBB and the pink sheets. The OTCBB and the pink sheets have very low listing requirements unlike the New York Stock Exchange or the Nasdaq. Since companies are usually new they cannot provide enough financial history. Or the company is close to bankruptcy, which can both cause low trading volumes. One more reason the penny stock market is risky is because of all of the fraud schemes out there. It gives people an opportunity to purchase large amounts of shares manipulating the market, then selling them to the inexperienced investors and when they are sold, the stock dumps.

If you are an investor, look into buying penny stocks, as was mentioned they can be a very profitable investment, but they are risky just like every other investment. Be sure to do research on the company before you purchase their stock, nothing is guaranteed in stock investments and you can lose everything that you put in. You can make a great deal of money buying penny stocks, just make sure you research a lot.

Keep researching and learning about [http://www.buypennystocksright.com/2010/02/buy-penny-stocks-with-controlled.html]how to buy penny stocks online. Start with fake money and then once you are confident, move on to the real thing. A beginner can make money with micro cap stocks, you just have to become an expert with all the knowledge you gain. Visit the links to get started. Now go find out what the [http://www.buypennystocksright.com/]good penny stocks to buy are and start making money soon.

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