Penny Stocks - A Great Way to Start Investing in Stocks and Make Money

Posted by Anderson Thomas on May 29th, 2019

When she informed me that she had decided to invest in penny stocks, I gave my daughter $ 250.00 to invest in the stock market and try to teach her a valuable lesson on responsible trade. I had a few questions about them before I was able to say "Good job" to my daughter or "What were you thinking?"

What exactly are penny stocks?

Small cap or micro cap stocks are considered to be penny stocks. They average price of a share of this kind of stock is less than $ 1.00 per share, although some people may define it as stocks selling less than $ 5.00 per share. Even though people may differ in defining the monetary amount of penny stocks, they are a few basics that will be agreed upon by every investor.

What types of companies have penny stocks?

Often smaller or newer firms have penny stocks. Market capitalization, or market cap, is one factor that determines how small a business is considered. Market cap is defined as a company's total trading value, it is calculated by multiplying each share's value by the total number of outstanding shares.

Where are these stocks traded?

On pink sheets or over - the-counter (OTC) penny stocks are traded. On major stock exchanges like the American Stock Exchange (AMEX) or the New York Stock Exchange (NYSE), you won't find them.