How To Buy Penny Stocks

By Megan Lydia

The SEC defines penny stocks as "low-priced, speculative stocks of very small firms. While penny stocks often are quoted OTC,eg on the OTCBB or in the Pink Sheets, they might also trade on instruments exchanges, including foreign securities exchanges. In addition, penny stocks include the stocks of certain personal companies with no active trading market.".

Last Q4, the SEC took the unprecedented action of banning short sales and looking for a short cover on financial sector stocks that taken a beating by the shorts. It is a lament that penny stock firms have been bitching of for years , but went unheeded. And now these established, down-on-their-luck finance companies have convinced the american public that they are deserving of billions in taxpayer bucks because they're established firms and not traditional penny stocks as outlined by the SEC.

So what have we done for these behemoths? We've changed the meaning of penny stocks to accommodate them. We've altered the level playing field by exempting them from short sellers. And now we are giving them tax dollars like some executive backed hospital while industrious entrepreneurs have to battle for their place in this shrinking economy.

You have heard of penny stocks, but the mere name of them scares you, simply because of its hopeful sound. Yet you know that many folk claim to have made absurd profits in the penny stock market. But before you make a decision to get involved in penny stock trading, you need to become educated in all the penny stock language, so that your definition of the best penny stocks matches that of those that trade them as a living.

There are people who define the best penny stocks vis their price per single share. The instruments and Exchanged Commission, or SEC, has established a minimum price for.

Stocks to trade on the larger exchanges ; typically it is $4 or $5 per share. So the best penny stock definition, according to them, would be any stock which did not meet the threshold $4 price to get it off the penny stock exchange.

Once a stock has been sent to the penny stock exchange, it will trade there till the company is ready to re-qualify it for a bigger exchange, and this may not happen even if it is trading above $4 or $5, because other conditions have to be met. So many traders look at where a stock is trading as the best penny stock backbone.

If you have decided never to hold a stock which gets over the $2 level because the best penny stocks to trade are under $2, then you should sell all your stocks as fast as they hit $2 instead of wanting another nickel or dime. Your best chance of being one of those individuals that make money in penny stocks, finding a way to fix on the best penny stocks, and sticking wh it, is your best hope. - 31970

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