Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Finance » Investing » Article

Penny Stock Investing guide 101

By Mansi gupta

Penny stocks are also known small caps, micro caps and nano caps. Penny stocks are low-priced issues that are often highly speculative. Usually a penny stock sells for less than one dollar and is highly volatile.

Penny stock trading has its pros and cons. While the benefit is accruing of incredible profit minimum time period, the disadvantage is huge loss due to timely and often unwanted and unexpected fluctuation in the market. Therefore prior to investing in penny stocks there are quite a few things that a trader should bear in mind.

To begin with the trader should at first examine the share structure and distribution of the shares of a particular stock. Doing this will help you in striking from your list of potential stocks any that indicate a highly disproportionate number of shares held in a single offshore account. For instance if you find millions of shares being held for less than a penny in a single offshore account, you can assure yourself that the moment you invest in the stock, heavy selling will result. Also the moment the stock prices begin to rise, buyers will not show any inclination towards purchasing and your shares will be rendered good for nothing. So it is preferable that you opt a stock where distribution points to a large number of holders.

A trader should always verify the status or legitimacy of the company. The best way to do it is to contact the company. Most companies list their main contact numbers. Don't hesitate in calling up the company. Since it is quite possible that a false line is being arranged for it, you should also contact the local operator and find business listings for the officers of the company. In case there are no listed numbers or local numbers to contact the company, drop the idea of that company completely. This is because there is a great threat of fraudulent companies hungry for your investment money. Also if the CEO attends your phone call or the number is residential, means that company is sham.

When a particular stock is in your mind, before making a move further, take a look at the latest and long-term history of the stock and the company. If the company's history is composed of reverse splits and reverse mergers, its future is quite precarious. Find a company that has a long and successful history. A company with a long time line can be considered to provide you fruitful returns.

Before investing any amount, take a look at your bankroll. Bankroll refers to the amount of money you can afford to spend and lose. Since these investments are a risky affair, it is better that pertaining to your bankroll; you calculate a certain sum, losing which, will not trouble you much. Only if you can bear a big loss without hassles, go for higher risk or gain investments, otherwise don't.

Since the penny stock companies often do not have definitive revenue systems, measurable inventory levels, reliable quarterly financials or even a definitive product, the worth of most penny stocks can be skillfully assessed. As the stocks of these companies move on speculation, the investor should use alternative research strategies to know which stock will provide great potential in future and has high degree of accuracy.
About the Author
Mansi gupta recommends that you visit for more information on Penny Stock Investing.

Article Source:
If you wish to add the above article to your website or newsletters then please include the "Article Source:" as shown above and make it hyperlinked.

  Some other articles by Mansi gupta
Traveling tips in Europe
Europe has always been a dream destination for tourists. With high skyscrapers, world's most beautiful beaches and rich cultural legacy, there is nothing more ...

Southern Comfort in elegant limousines
Limousines are the last word in elegant road travel. There are many services across America that run chartered services and you can charter limousines from them during your stay in the ...

The Importance of Multivitamins and Vitamins for Women
Whether you're trying to have a baby, already pregnant, going through menopause or worried about osteoporosis, it's worthwhile for you as a woman to consider the importance taking a multivitamin to create and maintain optimal health. ...

Ma Huang - Chinese herb
Ma Huang, the native-Chinese herb used in fat-burning supplements and also known as Ephedra, has been used as a natural treatment for a variety of illnesses spanning the past five thousand years. Early ailments treated by products ...

Hoodia - what it is, what it is used for?
Deep in the Kalahari Desert in South Africa a prickly like plant called Hoodia grows that could literally take your appetite away. Although this plant has been gathered ...

Student loan consolidation guide 101
The constantly escalating fees as well as the competition in the field of higher education have made the life of a student burdened by debt. Most of the students are financially not capable of bearing the enormous ...

  Recent Articles
Making an offer on an Irish Property
by Clint Jhonson

How To Search California State Tax Lien Records
by Zach Parker

Buying a House at Auction is Very Good Investment
by Kotia Kot

The Future of Gaming is here, why the Video Game industry is reaching new highs.
by Jonel Cordero

All The Relevant Details About Remortgage Quotes Uk
by Turk Malloy

How Investment Property Helps You Retire Early
by Marian Rozwenc, PhD

How To Overcome The Hidden Perils Of Discount Online Stock Trading
by David Jenyns

Advantages of Long Term Investing and Compounding Interest
by Ohad Livne

When And When Not To Use A Stop
by Larry Potter

Passive Investing - How To Grow $250.00 to $250,000.00
by Gil Washington

Notary surety bonds preventing failure
by rick martin

Online Trading India - Investment at Kotak Securities!
by Tanya Lobo

Can't connect to database