But carrying high risk... And are thus one of the most enthralling types of market investments available. Need to know all about penny stocks? Well, I cannot explain literally everything in a brief article like this... But I can offer you some of the key information you'll require if you have an interest in selling and buying penny stocks...

In technical terms, penny stocks are stocks that are accessible for the general public to buy, but aren't traded on any of the formal exchanges such as the Big Apple Stock Exchange, American Stock Exchange ( AMEX ) or Countrywide organisation of Instruments Dealers Automated Quotation System ( Naz ). Instead, penny stocks are traded on a dealer network and, as such, are called over the counter or "OTC" stocks.

The main reason why penny stocks are traded over the counter is usually because the most relevant penny stock corporations are comparatively tiny and do not meet the revenue and asset requirements of the major exchanges. Penny stocks also are called "unlisted" stocks since they're not noted on an exchange but are transacted by dealers who sell and buy over the telephone and employing a PC network.

Penny stocks are customarily priced at around about less than five bucks per share. But they shouldn't be confused with listed stocks that just occur to have had their price fall to less than five bucks per share. In case you are not sure whether a fixed company is a penny stock company or a listed company, look out for the company's stock code. If it has the code OTC or OTCBB after its name, it's an over the counter stock. A big company's stock can take a dive under $5 but still stay on a major exchange OTC stocks are traded on the over the counter bulletin-board or listed in the Pink Sheets because they can not meet the prerequisites of the major exchanges.

Since this draft is all about penny stocks, you're probably wondering about the difference between "OTCBB" stocks and OTC stocks. OTCBB stands for "over the counter notice board" and makes reference to penny stock corporations with a blemished credit record. Not surprisingly , OTCBB stocks are higher risk investments than OTC stocks.

What more is there if you want to know all about penny stocks? Well, it's a great idea to realise WHY a company issues penny stock. Fundamentally , it has a tendency to be offered by new, promising corporations searching for investment capital... Or struggling firms that can't meet the prerequisites of a major stock exchange listing. They might have even been dropped by a major exchange. It's your job to discover WHY a specified penny stock is a penny stock, and if it's certain to be a profitable investment. No question, penny stocks can be fantastically lucrative - a stock that rises from ten cents to ten bucks gives you a hundred times the quantity of your original investment.

On the other hand, make the incorrect call and you will lose your complete investment! If you'd like to know all about penny stocks you're sensible to teach yourself as totally as practical on the subject. Read as much as you can from well respected penny stock commentators and be certain to do your due groundwork on any penny stock you are considering purchasing.