About Penny Stocks - What You Need to Know to Earn a Million

Buying penny stocks is one way a person can generate fast cash on the stock market. Before you start buying though there are some things you need to keep in mind. These are considered lucrative, however, there are always consequences if one fails to find success in this high risk investment.

First of all, you should know what it is. This is unlike the stocks you might already be familiar with. On the whole, a share in this type of stock will trade for under a dollar. However, you may notice that others will describe it as a stock that will trade for under 5 dollars per share. Penny stock companies generally have a market capitalization under $500 million.

Stock share prices are extremely volatile. In fact they can fluctuate dramatically within a 24-hour span, which gives the chance for large gains. On the other hand, you can equally lose a considerable amount of money. These kinds of stocks are therefore always referred to as extremely speculative investments, in fact also a speculation that is much higher than when working with the usual stocks.

Companies usually have a low number of shareholders and their average market trading volume is considerably lower compared to "regular" stocks. It is pertinent to take note of this as you may discover just how challenging it is to sell your shares.

One of the main challenges involving stocks is being able to find enough information to analyze a company, and fast. The majority of buyers depend on recommendations from people they know as well as newsletters they subscribed to. It is important to know that stocks are attractive to scam artists in an aspect - they will try to involve you with pump and dump schemes. You will find that scam artists will hype up a stock in different online avenues but particularly in e-mail messages.

What happens in fraudulent schemes is that when fraudsters have made a profit on shares they sell, they will cease to promote the stock and this often leads to the stock price declining all of a sudden. This consequentially leaves other investors stuck with zero value penny stocks they are unable to sell. As you can see, there are a lot of sharks when it comes this type of investment, on top of its volatile nature. Use these basic facts about stock trading to avoid pitfalls and increase your chances of large gains.

Penny stock investing can be a good venture if you know where to invest your money on. Check out the hottest penny stock list online, update yourself with penny stock news and the latest trends, and start building your penny stock fortune now.

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Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities.

We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.