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Trading PennyStocks

Many new investors are lured to the appeal of penny stocks due to the low price and potential for rapid gains which in some cases may be as high as +1000% in a few days. Similarly, severe drops also occur and many penny stocks can drop over 99% in the long term. Stock Broker Frauds | Stock Prices

Pennystocks are considered high risk investments
and new investors should be aware of the risks involved.

What the SEC says about Penny Stock Investing

The term Penny Stock generally refers to low-priced (below $5), speculative securities of very small companies. While penny stocks generally trade over-the-counter, such as on the OTC Bulletin Board or in the Pink Sheets, they may also trade on securities exchanges, including foreign securities exchanges. Also see DayTrading

Penny Stocks include the securities of certain private companies with no active trading market.

Before a broker-dealer can sell a penny stock, SEC rules require the firm to first approve the customer for the transaction and receive from the customer a written agreement to the transaction. The firm must furnish the customer a document describing the risks of investing in penny stocks. The firm must tell the customer the current market quotation, if any, for the penny stock and the compensation the firm and its broker will receive for the trade. Finally, the firm must send monthly account statements showing the market value of each penny stock held in the customer’s account. Corporate News: DayJet uses microjets (Eclipse 500) to offer a flying taxi-service. | Make Money With VEHIX Used Cars

Penny stocks may trade infrequently, which means that it may be difficult to sell penny stock shares once you own them. Because it may be difficult to find quotations for certain penny stocks, they may be impossible to accurately price.

Investors in penny stocks should be prepared for the possibility that they may lose their whole investment.