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Penny Stock. By: Kennedy Poligratis Oct. 24, 2013 Period 2. Definition. Common shares of small public companies that trade at < $5 per share w/ a market capitalization greater than $50 million and less than $80 million. Limits. High risk Scam artists Usually deal with agents
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Penny Stock By: Kennedy Poligratis Oct. 24, 2013 Period 2
Definition • Common shares of small public companies that trade at < $5 per share w/ a market capitalization greater than $50 million and less than $80 million
Limits • High risk • Scam artists • Usually deal with agents • Must be very experienced
How do you make money on this type of investment? • If you can make 20%-30% of your invested money as profit, you should sell quickly. • Simple interest example: $3 = $100 x .03 x 1 year
Economic Climate • When the economy is good and the stock sells a lot of shares, you should sell quickly • Need liquidity in order to sell • If no liquidity, must lower price of stock
Online Trading Accounts • E-Trade • TD Ameritrade
Associated Risks • Businesses that sell stocks low are more likely to lose money • Price of stock can drop easily • Most brokers require $500 to start trading • Takes time to buy, sell or trade
Works Cited • http://www.allpennystocks.com/aps_us/hot_nasdaq_stocks.asp • http://www.investopedia.com/articles/03/050803.asp • http://trendshare.org/how-to-invest/should-you-buy-penny-stocks