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Explaining Penny Stocks

Aug 17, 2007
Penny Stocks are amongst the most uncertain and unpredictable investments you can easily make in today's financial markets. With appropriate decision management techniques, nevertheless, you can easily gain the benefits of the enormous percentage swings these explosive stocks have to offer, without putting your entire investment account at risk.

Of course, inexperienced Penny Stocks traders obtain burnt every single day investing in stocks, but where does all that cash go then? Well, the answer can be quite simple as in Smart money, Hedge Funds, market Making Firms, and believe it or not, even consumers just like you!

Penny Stocks mostly have market caps under $500M and are considered extremely speculative, particularly those that trade on low volumes over the counter. The Securities and Exchange Commission warns that, Penny Stocks may trade infrequently, which means that it may be difficult to sell Penny Stocks shares once you own them.

Because it may be difficult to find quotations for certain stocks, they may be impossible to accurately price. Investors in the field of Penny Stocks should be prepared for the possibility that they may lose their whole investment.

Many Wall Street firms simply do not feel that it is very necessary to dispel the myths floating around about stocks. Instead, they would rather exploit these misconceptions for their own benefit. For this reason, the information super highway that allows many individual investors to make their own knowledgeable and unprejudiced decisions remain strictly compromised when it comes to Penny Stocks.

Thousands of Penny Stocks see more active trading each day than 1000's of stocks listed in the local newspaper, but for some reason they never make it to the presses.

Mercifully, there is now an actively pursuing positive change for low priced equity traders by the diffusion of timely Micro Cap Stock market Analysis, Unbiased Coverage for individual stocks, and immediate access to the same information that has been available to Blue Chip market timers for years.

Well! In addition to offering the webs most sought after online information sheet for Real Micro Cap Stocks, Penny Stocks Daily also offers the free daily analysis of the Over the Counter Bulletin Board and Pink Sheets Markets, Penny Stocks under $1.00 listed on the glorious NASDAQ, AMEX and more.

By subsequent followings of these broad liquidity and price statistics on a day-to-day basis, one can gain a better feel of the overall markets, and therefore make better trading decisions.

Now, you have the new Dow Jones Industrial Average to detect market strength and weakness in Blue Chip Stocks, also you can easily know if you or someone you know are being a contraire or a trend follower in the under followed markets for stocks.

Well with studies you simply will not find out anything elsewhere. Also, be sure to review out the wide array of informative and tutorial articles on everything from Micro Cap Basics and Risk Management to strategies and ideas that you may not have thought of.

Eventually, for Penny Stocks be sure to review the extensive Frequently Asked Questions areas no matter where and it is most important to understand if you are in your investing decision-makings.

How to understand how liquid Penny Stocks are?

In the world of stocks, to know how many shares there may be beneficial is necessary and always keeping that in mind is critical. Here, do not screen for stocks that are potentially being sold short, but know that short sellers are certain buyers at some point or the other, and are a natural part of any monetary instrument.

Here to watch out for, are a huge percentage of the company shares being sold short, which would potentially raise the notion of unprotected short selling. This is when dishonest investors can sell shares on the splendid open market that cannot even exist aspect element within the Penny Stocks market.

This is noticeably not good for everyone those who are involved in stocks, and the SEC and congress are beginning to take steps towards combating this activity.

Nobody can guarantee the accuracy of the number of shares outstanding that are posted, and in many of the cases, companies can also issue shares in a way that is quite intangible, and there is an admittance that there will often be more issued, especially when the stock price goes up in dealing with Penny Stocks.

Never forget that the company is not selling these shares directly to the public, but is rather, issuing them to different corporations and persons for representing some sort of service or purchase, and they in turn can sell them to the open market dealing in Penny Stocks.
About the Author
William Smith the author provides much more financial information on many subjects as well as the secret to his success in the market along with 5 Free power stock picks emailed daily so grab your Free subscription on his website at Penny Stocks (All is Free)
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