One Day Starting Stock Trading – Penny Stock

What is a penny stock? The name is a very clear definition. Although there is room for different opinions, a penny stock purchase is very cheap. Usually less than $ 2 per share (less than 0.01 cents per share), a penny stock is very cheap. This is one of the most attractive factors in buying them as new investors. You can purchase a limited amount of stock in very small amounts of money.

For example, I recently bought a stock called VNGM, with earnings per share of $ 0.06. Since I've been watching stocks, the stock traded up to $ 0.61. If it comes back to that price, I will increase my profit 10 times! I own 1400 shares. An investment of $ 0.06 per share gave me a total risk of $ 84.00 (plus transaction costs). For a new investor, this limits the risk, while making the potential gains really exciting!

Trading in penny stocks is limited. This may make it harder to sell when you are ready.

It is also common that a penny stock rises sharply and then falls sharply in a very short period of time. This could be hours or days. Although penny stocks are cheap, one of the reasons they are "cheap" is that they are usually just start-ups. Many startups have failed. Understanding technology and fundamental analysis can have a huge impact in deciding when to buy and when to sell.

The benefit of a stock is that it does not expire. However, of course you can have worthless stocks. Penny stocks will certainly bring this risk.