Chapter 1: What Is A Penny Stock? Terminology
One thing that makes penny stocks so, well, frustrating to learn about is that they are often called by various different names. You may have heard them referred to as micro stock, nano stock, micro cap stock, small cap stocks and many other names. If that sounds confusing, just remember that they are generally all terms that rely simply on the fact that the stock is priced below a dollar to five dollar range. In other words, penny stocks are quite affordable, low costing stocks.
They will not allow those companies that are found to be fraudulent or those that are not legitimate in some other manner will not be provided with registration and therefore can not be sold as penny stocks.
Great Penny Stocks
But, if you were to purchase stocks that are traded on this market, you should know that NASDAQ does provide for a good amount of regulation.
So, you go ahead and purchase a good amount of it. In fact, there are big differences in which secondary markets in penny stocks can be quite tricky. A penny stock that has risen quickly only to fall hard is one that has been manipulated. More commonly, though, it is likely to be between twenty five and thirty five percent.
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