Start up and small time investors love investing in penny stocks not only because of their affordability but also because of its sheer mobility. These stocks are considered as one of the most volatile because compared with other stocks that rise a few percentage points, penny stocks have the potential to rise up to more than 30 percent in a single trading day. In some cases, it can impress a trader with 100% rise in day’s time. But of course, it’s not all gains – some penny stocks are does not perform as well as the others.
Penny stocks are named as such because of their really low price per share. They are usually priced around $5 per share but some are offered for as low as $.001 per share. When this happens, check and research – the company might have problems, mergers are happening or it could be due to a natural disaster. Before getting excited at low priced stocks – do a little digging to know the real reason for it.
In stock investing, there are no get-rich-schemes that can make you a millionaire in a day or two, but some tiny stocks have potential speed and pick up in a short turn of time. However, it is not a common occurrence and if a stock have “bottomed out,” it also has the potential to go further down.
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