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Daily archives "June 1, 2020"

How to Make Money with Penny Stocks (Part I)

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You can make money with penny stocks.

To find out how to make money with penny stocks, you’ll want to know all the outs and ins before you dive in. 

Day trading penny stocks have skyrocketed in popularity in recent years due to the low barrier to entry and the ability to turn small sums into large gains. Keen investors who have learned how to make money with penny stocks have the knowhow to make quick profits, but a huge number of penny stock investors will lose their shirts.

Soooooooo, can you make money with penny stocks?

The answer is yes, but it’s critical to remember that trading penny stocks isn’t like trading normal stocks. To learn how to make money with penny stocks, you’ll want to know everything there is to know about penny stocks. 

What are Penny Stocks?

Penny stocks are referred to by many names, like microcaps, stocks under $5, small caps, and more. But the one thing they share is that they’re typically not listed on a major stock exchange and necessitate a completely different approach than other stocks.

Normal stocks are listed on NASDAQ, the New York Stock Exchange, and other major markets. Penny stocks, on the other hand, are often traded on the OTC, or Over the Counter, markets. This doesn’t factor into the trade, however, and most online brokers support this market.

The OTC markets come into play when you think about where the penny stock is traded.

The OTC Bulletin Board, an electronic trading service operated by the FIRA, requires all businesses to meet the minimum standards of keeping current financial statements.

Penny stocks listed on publications like the Pink Sheets might not have fulfilled these requirements, giving you less information to establish your trading decisions on and taking a greater risk.