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For individuals just making their way into the world of investing, the phrase “penny stocks” has probably popped up now and then. The very phrase of the stock isn’t all that appealing. After all, individuals are in the market to make larger amounts of money than a few pennies. However, with the right knowledge and patience, it is possible to obtain an extremely desirable return on investment, all without investing much in the stock at all. Before going on and dumping money into just any penny stock though, it is important for an investor to know a bit about penny stocks, what they are and what the possible risk and rewards are.
First, penny stocks are also known as micro-cap stocks. That is because a micro-cap stock is a market capitalization that usually has between $50 million and $300 million in total sales (anything less is known as a non-cap stock). Any stock that is under $5 per share is considered a penny stock, so while there are some major companies with stocks under this level, the majority of stocks belong to new companies with little information about the company.
Penny stocks generally have greater risk than traditional stocks. This is because there is a lack of information regarding most businesses who are listed as a penny stock. Companies that are penny stock businesses is considered a “pink sheet” investment, which also means it is an over the country bulletin board investment. These such companies do not have to file with the Securities and Exchange Commission (SEC), which in turn means they do not receive as much press, or public scrutiny as the other, major stocks, traded on the Nasdaq and the New York Stock Exchange. Due to this, it makes learning and gathering information about these particular stocks difficult.
With little information and very little regulation revolving around penny stocks, investments made in these businesses are seen as high risk. However, as is the case with most forms of investment, the greater the risk the greater chance of reward. Additionally, as the stocks generally sell for only a few pennies, it is possible to spend only a few hundred dollars on a company and receive several thousand shares in return. Should the penny stock eventually prove fruitful, it has the possibility of drastically increasing in value (often over 1,000% in a few months, which most major stocks can’t do).
What is DTCC? “DTCC” stands for The Depository Trust Clearing Corporation”. DTCC is a member of the U.S. Federal Reserve System. It is a limited trust company under New York State Banking law and a registered clearing agency with the SEC. The purpose of DTCC is to reduce costs associated with securities processing. Some brokers won’t deal with stocks that are not cleared because they are more expensive for them to trade.
Companies that are listed on the NYSE, the AMEX or NASDAQ are automatically cleared by DTCC. Companies who trade the Pinksheets or OTCBB will have to apply for initial eligibility which can be a lengthy process. Even then, DTC may reject a company without having to justify its decision.
PLANTATION, Fla., May 21, 2013 (GLOBE NEWSWIRE) — TradeStation, a Monex Group company (TSE: 8698) and award-winning broker-dealer and futures commission merchant, received two awards for its “The Proof is in the Platform” advertising campaign in the Financial Communications Society (FCS) awards ceremony held in New York City on May 16, 2013.
TradeStation’s “The Proof is in the Platform” campaign, created with DiMassimo Goldstein (DIGO), won “Best in Show” – the highest honor – in the Consumer Retail category. TradeStation also won a Gold trophy in the multimedia category.
Founded in 1967, the FCS has evolved into the singular voice of the financial services marketing community by bringing together industry professionals to further the development of their shared businesses through education and networking, while demonstrating a commitment to philanthropic endeavors.
“This award is truly a great honor. TradeStation is a recognized leader in creating powerful and innovative tools for traders,” said Erik Jepson, Chief Marketing Officer of TradeStation. “This campaign was designed to make our feature-packed active trader platform come alive for consumers across multiple media touch-points, and demonstrate the real power we offer our clients. The proof really is in the platform.”
To see part of TradeStation’s award-winning campaign, take the TradeStation Tour at www.tradestation.com/tour.
To speak with an account executive about TradeStation or to open an equities and/or futures account with TradeStation, call 1-800-808-9336, or visit https://www.tradestation.com. Institutional traders should call 1-800-579-7616. To speak with an account executive about opening a forex account, call 1-800-497-8712 or visit http://www.ibfx.com/ or www.tradestation.com/products/forex for more information.
To receive updates and learn about future events, please visit the TradeStation Facebook Page.
TradeStation is an award-winning online brokerage firm and trading platform. In the March 2013 Barron’s magazine review of 24 online brokers, TradeStation was ranked Best for Frequent Traders and Best Trading Experience and Technology, and received the highest star rating for International Traders. In the February 2013 Technical Analysis of Stocks & Commodities magazine annual Readers’ Choice Awards, TradeStation was voted Best Trading System – Stocks, Best Trading System – Futures, Best Institutional Platform, Best Professional Platform, Best Online Analytical Platform and Best Real-Time Data. In the January 2013 Investor’s Business Daily Best Online Brokers Report, a major new annual survey of active investors conducted by Investor’s Business Daily, TradeStation was ranked among the top five online brokers for Overall Customer Experience, as well as best for Equity Trading Tools and among the top five in three other key categories. For more details, visit our Awards page.
TradeStation Group, Inc., through its principal operating subsidiaries, TradeStation Securities, Inc. and IBFX, Inc., offers analytical and trading platforms to the active trader and certain institutional trader markets. The TradeStation platform offers electronic order execution and enables clients to design, test, optimize, monitor and automate their own custom equities, options, futures and forex trading strategies. TradeStation Group is a wholly owned subsidiary of Monex Group, one of the largest online financial services providers in Japan.
TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC, NSCC, DTC, OCC & NFA) is a licensed securities broker-dealer and a registered futures commission merchant, and also a member of the Boston Options Exchange, Chicago Board Options Exchange, Chicago Stock Exchange, International Securities Exchange and NASDAQ OMX. Its TradeStation Prime Services division, based in New York, seeks to provide prime brokerage services, including securities lending, to small and mid-sized hedge funds and other firms. IBFX, Inc. (Member NFA) is a Retail Foreign Exchange Dealer (RFED) that provides forex brokerage services directly and through its TradeStation Forex division. IBFX Australia Pty Ltd is registered with ASIC and provides forex brokerage services outside of the United States. The company’s technology subsidiary, TradeStation Technologies, Inc., develops and offers strategy trading software tools and subscription services. TradeStation Europe Limited, an FSA-authorized brokerage firm, introduces UK and other European accounts to TradeStation Securities, Inc., IBFX, Inc. and IBFX Australia Pty Ltd.
Media Contact: Loren Lopez (954) 652-7011 Reposted from GlobeNewsWire.com
Restricted stock, also known as letter stock or restricted securities, refers to stock of a company that is not fully transferable until certain conditions have been met. Upon satisfaction of those conditions, the stock becomes transferable by the person holding the award.
Shares outstanding are all the shares of a corporation or financial asset that have been authorized, issued and purchased by investors and are held by them. They have rights and represent ownership in the corporation by the person that holds the shares.
Passive management (also called passive investing) is a financial strategy in which an investor (or a fund manager) invests in accordance with a pre-determined strategy that doesn’t entail any forecasting (e.g., any use of market timing or stock picking would not qualify as passive management). The idea is to minimize investing fees and to avoid the adverse consequences of failing to correctly anticipate the future. The most popular method is to mimic the performance of an externally specified index. Retail investors typically do this by buying one or more ‘index funds’. By tracking an index, an investment portfolio typically gets good diversification, low turnover (good for keeping down internal transaction costs), and extremely low management fees. With low management fees, an investor in such a fund would have higher returns than a similar fund with similar investments but higher management fees and/or turnover/transaction costs.
Active Management refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index. Investors or mutual funds that do not aspire to create a return in excess of a benchmark index will often invest in an index fund that replicates as closely as possible the investment weighting and returns of that index; this is called passive management. Active management is the opposite of passive management, because in passive management the manager does not seek to outperform the benchmark index.