Can you explain Penny stocks to me?

Discussion in 'Penny Stocks' started by askanison, Jul 30, 2014.

  1. Salauddin Morshed

    Salauddin Morshed Member

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    The upside of the penny stock is high return and the downside of the penny stock is high risk. Whether to make an investment in penny stock or not, depends upon investors’ risk preference level. A risk seeker investor will be easily interested to invest in the penny stock. But, a risk avoider investor will not be interested to invest in the penny stock.
     
  2. ArielGold55

    ArielGold55 Member

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    Pfff... hell yea! Bring it on, and thanks a bunch. I've been looking into Tim Sykes, and this seems pretty solid, but I want to do my research up one side of the mountain and down the other before I put a penny in penny stocks.
     
  3. ScooterBrandon

    ScooterBrandon Senior Investor

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    Penny stocks are ownership shares worth pennies in typically small, obscure or startup firms.
    They are cheaper to get into and have a very high potential upside.
    They can be traded with the same strategies as regular equities, just with much smaller unit prices and much more volatility.

    They are very risky, they are less regulated too.
    They are traded on OTC's or pink slips.
    If this sounds like too much information, this is only the surface and your not ready for penny stocks.
    You need a solid understanding of the functions of capital markets to truly understand what penny stocks are.
    They are a very simple concept (literally stocks that cost pennies) but also require a deep level of financial knowledge to trade (ideally.)
     
  4. Lynk

    Lynk Member

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    It seems like these are a really dangerous investment from what I understand?

    As far as I can tell it requires a ton of research to understand each investment and for the low cost of the investments, I have to wonder if it's worth the time? I've decided not to pursue them, but I really find the idea fascinating. I just don't know who to trust on that side of the industry and it seems I'd have to devote a ton of time to understand it. In fact even the posts on this thread make me think it's really better for those of you with a really solid understanding of investing already.
     
  5. remnant

    remnant Well-Known Member

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    Penny stocks, also known as cent stocks are common shares of small public companies that trade on low prices per share. They can range from 1-5 dollars. Therefore they are convenient for small time investors. They are susceptible to manipulation by speculators who buy large volumes and create a hype that they have insider information that the value is going to rise through various fora before disposing them to investors who wish to make a quick profit.
     
  6. Hedonologist

    Hedonologist Well-Known Member

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    Volatility is higher in penny stocks. Some consider them a complete gamble, but I've say normal investment knowledge and strategies are still relevant. Penny stocks are not suitable for long term stable investments, but are more for those day traders and others looking to make a profit in a shorter time frame.
     
  7. kirtimeliwal

    kirtimeliwal Active Member

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    Penny stocks are type of stocks generally traded at a lower prices. They have less market capitalisation, they are most illiquid, and this type of stocks are usually listed on a smaller exchange.
    To take right decision, an investor can refer financial expert's best stock tips and market calls recommendations.
     

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