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).
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
“This is a massive low-float opportunity!”
These words go out in many stock alerts, and although you may know low-float is a good thing, it isn’t exactly self-explanatory.
In a publically held company all of the issued shares are not available for trading. A portion of the shares are restricted. That means that they are held by the company or the officers of the company. The “float” is the number of stock shares that are publicly owned and available for trading. The float is calculated by subtracting restricted shares from outstanding shares. Another term for float is outstanding shares.
Some well-known companies have used the concept of restricted shares to drive up their stocks trading value. LinkedIn (NYSE:LNKD) only released 10% of the total shares in initial public offering. This resulted in the stock price doubling in the first day.
A stock doesn’t need to be heavily restricted for it to have low outstanding shares. The bottom line is that the fewer shares available for trading the greater the chance of large gains in a short period of time when volume is high. Along with this potential comes a greater risk, of course. It is up to every individual investor to determine if the potential for huge gains is worth the risk.
The first thing that you must do, in order to trade stocks, is open a brokerage account. While you can still open brokerage accounts through an actual person, simply the best and cheapest way is to open an online brokerage account. We suggest using Etrade.com because, in my opinion, it is simply the best bang for its buck on the Internet today.
What Etrade offers:
Stocks and ETFs: $9.99 if 0-149 trades per quarter; $7.99 if 150+ trades per quarter
Options: $9.99 plus $0.75/contract if 0-149 trades per quarter; $7.99 plus $0.75/contract if 150+ trades per quarter
Mutual funds: $19.99
Futures contracts: $2.99 per contract, per side + frees Investment products: stocks, bonds, mutual funds, futures, options, ETFs
Minimum deposit to open Etrade account: $2,000 for margin account. For securities accounts (except retirement accounts), an account minimum deposit of either at least $500 in cash or a deposit of securities is required within 60 days of account opening for the account to remain active. There is no initial minimum deposit requirement for retirement, custodial, or employee stock plan accounts. Accounts not meeting the minimum deposit requirement will be closed after 60 days.
Information courtesy of: http://www.brokerage-review.com/
Signing up is simple:
Just go to Etrade.com and click on “Open and Account” and fill out the required information. Make a deposit and start trading!
Further tips and information will be given to you on which stocks to trade and when, if you subscribe to our newsletter!
This early half-hour (9:30-10:00am) is NOT for rookies aimlessly throwing bids out, rather it is for experienced (aggressive and winning) traders. A lot is going on in the first 30 minutes, and it can be overwhelming for the rookie. Many of you have seen this and learned some lessons the hard way. I want to assure you that even a rookie can make good trades armed with the right information and a solid strategy. The first 30 minutes are usually the most exciting and lucrative time to trade penny stocks. It can be very profitable, sometimes allowing you to be on the golf course by noon with a smile from ear to ear.
With that said, I’ll tell you how I would approach this situation. Let’s assume I have already locked in on a stock that is showing a gap pre-market (previous close $.05 / Gap pre-market $.07) and 3 months prior was trading around $.14 with minimal or decent volume. I’ve made the decision to trade the stock aggressively knowing that if things don’t go my way I could lose everything, or a good portion of what I’m about to invest.
It’s about to open at $.07, having closed the previous day at $.05. I want in with the idea that, with the correct volume, the price could reach or even exceed a previous high. I place a bid above the current offer (if you have a level 2 open for the stock you can see the exact current offer and line up after lowest offer), maybe $.085 or $.09. This does not mean it will fill that high but this gives you a better chance of getting into the lowest offer or in line as the highest bid will get the lowest offer in most cases.
Prior to making this transaction I set my exit at a gain or loss of 20% and without hesitation I will sell at that mark, win or lose. It’s aggressive strategy but you have to be aggressive to trade penny stocks and make profits.
With a good plan, you can make MASSIVE PROFITS by buying aggressively and having a safe exit strategy in the penny stock markets.