Chapter 4: Penny Stock Bidding Success - Bid versus Asking
The first thing to know is the difference between what is called the bidding price and the asking price.
In the bid price, the rate is what someone out there is willing to pay for the security or stock. This is also the number at which you could sell your stock if you decided to.
The asking price, on the other hand, is the amount at which you are willing to sell your security for. In other words, this is the amount at which others would have to pay to get your stock.
Understanding the difference here is important. If you are looking to purchase a stock, you will need to provide an accurate bid for it. If you are looking to sell your stock, you need to know what you could get for it.
They are called pink sheets because all of the information including lists and prices are printed onto these narrow sheets that are generally pink in color.
Pennies Stocks
Yet, when the stock does not have any additional buyers, which is likely to happen quickly, the stock will bottom out or simply fall through leaving everyone with a stock that has nothing to it.
In the following chapters, we will talk more about determining your level of risk as far as penny stocks are concerned. But, you do not and should not feel that you are being pressured into any sale. Get all of your questions answered so that you can make the right decision beyond a doubt. Therefore, we now need to talk about you.
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