Best Penny Stocks

sandy

Last Updated on June 15, 2022

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Everyone has to start their stock trading journey somewhere. Some people start by investing in big industries and companies that have seen nothing but growth for ten years. Many people try day trading, trying to catch stocks as they make small changes throughout the day. But there is another way.

Trading penny stocks is a great place to start if you are new to stock trading. This is because it’s very much like normal day trading, but on fast forward. Everything in penny stocks happens much faster than it does with normal stocks. This means you do not need as much patience to get results.

But perhaps more importantly, you also do not need a huge amount of capital to get started trading penny stocks. We’re getting ahead of ourselves though. What is a “penny stock”?

What is a Penny Stock?

Penny stocks have a specific definition: Any stock valued under five dollars per share is a penny stock.

This is important, as it should dispel a few presumptions people have about penny stocks. For instance, penny stocks do not have to be valued at “a few pennies” per share. This perception circulates broadly and rapidly, but you can probably see why its lack of precision can become a problem for people.

If the penny stock label was attached to a stock that traded for “a few pennies”, what would the exact number of pennies be? Five? Ten? Having a specific price for the definition of the term is important. Only once the price is specific can it be regulated. The $5 price was chosen for that reason.

Penny stocks also do not exclusively return yields in pennies. It is likely they will, but that is a matter of your size of investment as much as it is a matter of the stock’s value appreciating within a given time.