Penny Stocks – A Speculator’s Heaven

Last Updated April 30th 2019
4

If there’s any hope of you getting rich quick – this might be one of the ways

You must have heard of penny stocks at some point in your life. Remember the Wolf of Wall Street? It’s the stocks he used to get rich by aggressively selling shares of small companies, that are technically bankrupt and making millions from commissions. He later got into trouble with authorities for deceiving his customers.

They’re the stocks you need to buy if you expect sky-high returns. But you also have to be prepared to lose everything. You must have a high tolerance of risk because some very obscure and absurd events could move their prices.

Now, what are the traits of penny stocks, apart from their low price per share? The most important is the lack of any respectable history – either it’s not too good or it’s not too long. So no one can guess what their intrinsic value is. This is why their liquidity is much lower since most investors stay away from them. For this same reason, their bid-ask spread is huge. It leaves the risk of you not being able to even get the order you want at the price you want in a decent amount of time at times.

They’re also much less regulated and not obliged to disclose anywhere near as much information as a company listed in the top 100.

If you are going to dabble in penny stocks, you should be aware of the risks involved not just the potential gains. Make sure you research the company thoroughly and hope for the best! you don't have to be right all the time to make money as long as you are right on the big gainers.

 

If you enjoyed reading this article from Trading Education, please give it a like and share it with anyone else you think it may be of interest too.

We'd love to hear from you!

Please share your comments or any suggestions on this article below

more from Stock Trading Articles...

Trading-Education Staff
Let’s talk about cryptocurrency mining today.  If you are a cryptocurrency enthusiast you are most probably well aware of the concept....
Trading-Education Staff
Dogecoin (DOGE) did originally start as a joke but over time has left a noticeable mark on the world of cryptocurrency.  Australian creator,...
Trading-Education Staff
Dash was originally launched in January 2014 under the name ‘Xcoin’ with a digital token XCO, however, another company was already using...
Trading-Education Staff
If you have any plans to invest in the crypto market this year, we have good news for you. According to many crypto enthusiasts, 2019 and 2020 would...
Trading-Education Staff
EOS was released on 31 January 2018 and in little more than a year, it has earned the 8th spot on CoinMarketCap at the time of writing. It is...
Trading-Education Staff
Tron is one of the fastest rising cryptocurrencies of 2019 and is attempting to achieve a lot. Essentially they want to revolutionise how the...