Penny Stock Essay

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How to Trade Penny Stocks Online?
Penny stocks or microcap stocks are defined as companies that are trading below $1 per share. Though these stocks often trade on Pink Sheets, some analysts and the Securities & Exchange Commission (SEC) also consider companies that are trading below $5 on NASDAQ, or other exchanges with a market capitalization between $50 and $300 million are penny stocks.
Investors can buy penny stocks online by using online broker services. Penny stocks can easily be bought at any general public area as these stocks are not necessarily being traded on stock exchanges. If you are using broker services you must make sure that your online brokerage account provides you with a lot of valuable information so that you can make …show more content…

Investments always come with some risk attached to it; however, investors can reduce these risks by using the right strategies while buying and shorting these stocks. It is also important to know that a successful past performance does not always dictate a prosperous future.
In the history of stock exchange, many successful companies have started their businesses from the bottom and with very little market capitalization. Success for companies does not come by default; a lot of resources have to be put in. Whenever investors want to invest in penny stocks, it is important for them to investigate the company’s future plans and expectations instead of past performances and financial results.
For instance, if anyone wants to buy a penny stock operating in the oil & gas industry, the person must look into the fundamentals of the oil & gas industry before picking or shorting these stocks. The performances of these stocks are directly correlated with the variation in oil & gas prices. Therefore, a keen eye on oil & gas prices is very crucial to the selling or buying of these stocks.
Similarly, if you are investing in any stock operating in the mining, chemical or retail industry, it is important to look into every detail of these industries before deciding to invest in these

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