Penn Stocks For Dummies

Crash course through penny stocks: Penny Stocks For Dummies

Are you wondering about what are penny stocks, why people trade them and where they can be purchased? You are in the right place!

Penny Stocks are micro chip stocks which trade somewhere between a few cents and 5 dollars ( or ten as some investors like to say). These stocks are so small and cheap that they rarely qualify for a listing on a large exchange like AMEX or NASDAQ and thus they have to trade on over the counter boards. These boards are small exchanges, with low regulations that list companies with market capitalization of less than 300 million dollars (aka penny stock companies).  These boards are public and offer the opportunity of purchasing a penny stock to practicaly everybody.

In order to purchase penny stocks on the over the counter exchange, you will need to take the following steps:

1. Read penny stocks for dummies and do tons of online research. Before even attempting to trade a type of stock as volatile and risky as penny stocks, you have to study up. 

2. Get a broker. Penny stocks require you to go through a broker and have an active brokerage account. While some brokers can be pricey, there is a number of great discount brokers who are more suitable for penny stock trades.

3. Get a newsletter. There are many sources of information on penny stocks that can be found online. The problem is that you can never know how much of it is sincere and how much is plain old spam. In order to avoid confusion, sign up for a reputable newsletter. While some newsletters can be a little pricey, they are definitely worth it in the end.