The top trading stocks among penny stocks are called penny stock picks. They are also known as micro-cap stocks or small-cap stocks and generally sell for less than $1.00 per share, although some that sell for as much as $5.00 per share are also called penny stocks.
Penny stocks are traded on the “pink sheet” or over-the-counter (OTC) market, they are typically not traded on major exchanges such as the New York Stock Exchange (NYSE) or the United States Stock Exchange. United States (AMEX). These types of stocks are considered risky but are popular with financial speculators.
Of course, there are some risk factors to consider if you decide to try your hand at trading penny stocks. Most are offered by smaller, newer companies and the risks are often associated with that fact. They include stock market hype, lack of visibility, reduced marketability, equity risks, and securities subject to volatility and dilution.
Penny stocks have the main advantage that they do not require a large investment to start trading and can turn a minimal investment into a large profit.
Information from newsletters, assistance from stockbrokers, and using your own personal opinion are all ways to help pick penny stocks that make money. There are online brokers that are available to assist the investor in trading these types of shares as well.
Some factors to consider when using penny stock picks are encouraging trading plans, excellent trading volume, and a company’s financial stability. It is worth noting that investors should be made aware of all possible risks associated with trading penny stocks, especially with regard to picking free stocks. So, the more you spend on methods of penny stock picks, the better the chances that you will include top quality picks.