Have extra cash? Why not invest in stocks? But how can you invest in stocks if your savings is not enough to buy a stock? Try investing in penny stocks.
Penny stock is commonly defined as any stock that is trading for less than one dollar. Some defines it as any stock below fifty cents or a stock less than a dollar that’s trading off a major stock exchange. Penny stock is usually traded in over the counter (OTC) market such as “Pink Sheets” and “Over the Counter Bulletin Board (OTCBB)”
OTC market is not an organized marketplace or exchange. OTC is a catchall for any market in an equity security that is not listed on a US exchange or on the NASDAQ Stock Market. OTC securities are issued by companies that either choose not to list, or are not able to meet standards for listing on NASDAQ or a US stock exchange.
OTCBB is the place where stocks usually not found in NASDAQ or other major exchanges are listed. Stocks listed on the OTCBB are not covered by SEC regulation, thus making them high-risk investments. However, some companies, with the hope of future listing on the NASDAQ comply with SEC rules and are behaving well. These are the companies you should be investing with. Having the “list of penny stock” is one of the tools to have in order to work your way in this investment.
Pink Sheet is another OTC market where penny stocks are traded. Both OTCBB and Pink Sheet are not governed by a security regulatory authority. It is not a stock exchange. The Financial Industry Regulatory Authority (FINRA) and U.S. Securities and Exchange Commission (SEC) regulate all Market Makers in Pink Sheet and OTCBB. “FINRA’s responsibilities include establishing rules governing the business conduct of its broker/dealer members; setting qualification standards for securities industry professionals; examining members for their financial and operational condition, as well as their compliance with appropriate rules and regulations; investigating alleged violations of securities laws; disciplining violators of applicable rules and regulations; and responding to inquiries and complaints from investors and members.”
You can find several sites wherein penny stocks traded in OTCBB and Pink Sheet are analyzed. These sites come up with suggested list of penny stocks to buy or hot picks.
Practically anybody can create a hot pick list of penny stocks. Since many people have access to these lists, it becomes the subject of manipulation and self-serving forecast. Apply great caution in browsing the so-called hot list. List of penny stocks could be up to date while could be outdated. Save yourself from sham companies, conduct your own research and do not rely so much on penny stock hot pick list.
The internet provides various websites declaring a list of penny stocks. A list of penny stocks is usually accompanied by financial analysis and forecast by brokers or investment advisors. You may use the list of penny stock as one of the basis as there is a possibility that one or two from the list of penny stocks are doing legitimate business. List of penny stocks are published in blogs, chat rooms, news letters, forums and the likes. These online communities are compose of experienced, curious, beginners, and cons. Unfortunately, cons make up the most percentage.
Penny stock is a highly volatile investment, extreme caution is necessary in dealing with penny stock. Don’t let any person or seemingly informative list of penny stocks influence you in your investment decision. Conduct your personal research and beware of scrupulous bogus companies. Invest a small amount first to test the waters.