Home > Investing Articles > Pennys For Stocks?

Pennys For Stocks?

Todays Date: December 15, 2018

When you hear the term Penny Stocks you think stocks for a penny. It makes sense, but penny stocks are actually any stocks that trade for less than five dollars or it can mean any stock that’s not traded through the big exchanges. Penny Stocks tend to be high risk investments that you need to take some serious precautions with.

A pump and dump scheme is when anyone sells a stock for an inflated price, and then the vendor dumps the expensive shares.

A pump and dump scheme is when someone sells a stock for an inflated price, and then the seller dumps the overpriced shares. This causes the price to drop and the investor to potentially lose a lot of money. Also since penny shares are worth so little they’re often not tracked or reported which raises the potential for fraud.

These firms are frequently debated on the radio and other kinds of things. You could see glowing comments on their notice boards and other mediums. These postings are irregularly done by a single person or perhaps a complete team and they often have a tendency to block out individuals that are urgent giving the belief that it’s a great company in order to get bankers to buy their stocks.

Often companies will talk about their economic growth and will claim that their stock is high demand. These companies are sometimes mentioned on the radio and other sorts of things. You might even see glowing comments on their message boards and other mediums. These postings are sometimes done by a single person or even an entire team and they tend to block out those who are critical giving the impression that it’s a great company in order to get investors to buy their stocks. As soon as they’ve sold the stocks they will then sell their shares causing the price of the stock to rapidly deflate.

Penny stocks are often sent thru spam and these trackers can be convenient in helping identify which to stay away from. Penny stocks are typically traded outside the major exchanges as the firms selling them are kicked out of the major ones for not meeting the minimum bid of $1 for a sequential period.

Once this happens the stocks are generally mentioned on the OTC Circular Board. The NASD has been making an attempt to clean the bulletin-board by requiring firms to submit quarterly and yearly reports to the SEC to help keep crime rates down. The truth of the problem is that penny stocks have a tendency to be a dangerous if you do not know what you are doing and even often when you do.

The truth of the issue is that penny stocks have a propensity to be a threatening if you don’t know what you’re doing and even frequently when you do. You will not even realize you are buying penny stocks if you buy them at the inflated costs. Just be truly careful with what you do and be sure to have a quick look at the company, possibilities are if their stock has risen quickly lately, they won’t be extremely convincing.

Devynne Tilimockinsen is an author with special knowledge aboutinvestingShe can also help you invest properly for the future.

http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/digg_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/reddit_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/dzone_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/stumbleupon_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/delicious_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/technorati_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/google_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/yahoobuzz_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/mixx_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/twitter_32.png http://financearticledirectory.com/wordpress/wp-content/plugins/sociofluid/images/jamespot_32.png
Comments are closed.