Penny stocks also referred to as cent stocks are the common shares of companies trading in low share prices; these companies are the small public companies. In other words penny stock is the share you buy with investment below $5 that is per share is worth $5 and below it. These penny stocks in the United States are generally either bought/sold on OTC Bulletin Board that is over the counter or traded on Pink Sheets. The penny stocks rules and regulations in the United States are always defied and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Guide to investing in penny stocks: hot penny stocks and penny stocks to watch
The amount with which per share can be bought has made penny stocks quiet popular where you can invest under $5 to buy and own a share of a company. This means that if you buy wisely and sell it at the right time you can make profits considerably. Although the risk factor associated with these penny stocks is equivalent and similar to the larger stocks where the invested sum is considerably and significantly much high.
Targeting top penny stocks to profit in penny stock trading
To decide on which penny stock to buy or trade on depends on the fundamental and technical analysis of the penny stock. This means that one has to always be on a constant look out for penny stocks to watch. Such penny stocks are the hot stocks that are sure to bring you profit.
Penny stock investors are always on a quest of top penny stocks or hot penny stocks that undeniably has a greater probability of transforming portfolios in a considerably short time. The top penny stocks to watch do return incredible gains when invested in and thus they are a great investment to make.
Though there are risks involved with penny stocks similar to any other stocks like liquidity, shady reporting standards, etc. with a few simple tips you can minimize or totally avoid the risks when trading penny stocks.
Tips for investing in penny stocks
Always target the companies that have considerable growth of their cash flow and thus profiting considerably and consistently from this cash flow. Such companies are great options to invest in and research is thus crucial in penny stocks to watch.
Most of such companies are often not mentioned or spoken about in the media and so the task of hunting down such companies gets difficult. In such cases penny stock service providers and investment software come into picture. The penny stock service providers are useful especially if you are new to trading in penny stocks. They carry out market research on day to day basis to provide you the best pick or the top penny stocks to watch. These penny stock advisory services are both free and paid services where you also get a chance of getting educated about penny stocks.
Such services often update the current top penny stocks and directly send it to you either by mail or Twitter message or directly to your cell phone. Use penny stock advisory services not just for penny stocks to watch but also to select the right reliable and trusted penny stock brokers.
An important tip to profit in penny stocks trading is acting quickly. The penny stock market changes on daily basis and thus the top penny stock today might decline in a matter of few days to weeks. It is better to be well prepared always and sell quickly at the right time before the value drops.