Chapter 1: What Is A Penny Stock?
The first order of business here is to define just what the term; penny stock refers to. The bad news is that there are many mixed definitions out there regarding what this type of stock actually is. Therefore, you need to understand what things are considered to be penny stocks and then how to determine what the stock really is.
For example, a penny stock is a common term used to describe a stock that is inexpensive to purchase per share. This could mean:
A stock that is priced under one dollar per share
A stock that is priced under five dollars per share
A stock that is traded on what is called pink sheets
Any over the counter, or OTC, type of stock
The United States Securities Division says that a penny stock is one that is valued under the value of five dollars and is traded either on pink sheets (over the counter) or on the NASDAQ.
Yet, even with all of that said, people still flock to them.
Penny Gold Stock Picks
Now, you are likely to hear both good things as well as a few bad things when it comes to these guys.
They are not telling you the entire truth as far as price goes. That means that you need to truly understand how much risk you can handle. As we mentioned, there are good and bad aspects to each area of penny stock investing. This allows you to do the homework that you need to in order to learn more about the company in general. Before you get started with them though, it is important to realize that there are both good things and bad things about them.
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