What are penny stocks? Beginners in the stock market may have this query. Here is a simple description of this term. Penny stocks are simple low priced and speculative stocks. Although it has been already said that penny stocks are low priced stocks, the maximum value of a stock so that it can be called a penny stock is variable and it depends solely on an individual. However, $1 priced stock is generally considered as a penny stock. Penny stocks are normally traded on over-the-counter market and are dealt in smaller exchanges.
Let us discuss something more about penny
stocks. You can get daily alerts regarding this through the penny stock
newsletters. There are various such newsletter providers who inform you when a
certain stock is expected to gain massive gain in near future. In such
conditions if you are subscribed to their service they may email you the news
and alerts. Most of these organizations ask you to pay some amount of
subscription money or many others may provide you with free penny stock alerts.
Why these alerts are getting importance is due to the fact that when specific
news is transmitted to any means, it may take some hours or so before they
reach you. But, when subscribed to the alerts, you get instant information of
any related market trend change or hot penny stocks picks directly to your
email. Instant information regarding such stocks may help you get that one day
high flying benefit. Although most of the times the information is regarding a
short term or a day of sudden change in the market, sometimes it can even be
long term stock investment information.
Many good company stocks are undervalued
and these stocks are rarely recognized by the mainstream Wall Street. As soon
as such a stock is identified in the market, the penny stock alert provider
would send you an instant email regarding it. You may get a list of penny
stocks to watch and select one to invest in. Sometimes you may gain enormous
profit from the information gained from the penny stock news alerts. A penny
stock market may inform you of the following.
- Big news that has just arrived and possess capability to bring drastic change in the market trend
- Any unusual momentum or volume in the market
- Stocks that are excessively promoted and thus creating massive buyers
- Certain suspicious insider buying of certain stocks
- Any buzz that may come out from the message boards, chat rooms, related to some community insiders
- High powered technical indicators and certain chart patterns
- Discovering companies that have potential of growth in future or may be even doing well at present but people are unaware of it
The factors discussed above can create a
large cap NYSE stock to get hike up to about 10-30%. A penny stock can
experience a positive effect of about 100% to 2000% due to changes in these
factors. The hot penny stocks that are in positive momentum can earn you really
good returns and so the penny stock alerts may act as a real boon to you if you
are someone who wants to earn the other way.