Financial
Library
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What
are Penny Stocks? |
Individuals new to investing in penny (micro-cap) stocks should
realize the difference between penny stocks and the more conventional
blue-chip investments, like a Microsoft or General Electric.
There
is no universal definition of a penny stock, as some define
it as a stock priced under a dollar where as others believe
five dollars to be the benchmark. The Securities Division
considers a
...More
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Understanding
the Pinksheets
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The Pinks Sheets are relatively unknown or misunderstood by
most investors. There are over 18,000 public companies in the
United States. The largest and most well-known companies trade
on national stock exchanges like the New York Stock Exchange
(NYSE), the NASDAQ system, and the American Stock Exchange (AMEX).
There are stringent listing requirements ...More
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The
Successful Microcap Investor
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Successful micro-cap investors do not avoid risk! The successful
micro-cap investor views the possibility of reward as a greater
motivation than the fear of loss. The mental challenge of studying
services, products, and management overwhelms the fear that
comes with the potential for loss. One’s own belief in
their due diligence and capacity to analyze facts and projections
is the prime motivation. The gain’s being a secondary
motivation and a pleasant reward for your quality investment
decisions. ...More
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Choosing
Right Broker
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There are many factors to consider when choosing a broker. One
of the most important is finding a broker that gives you the
freedom to watch and trade your investments with the lowest
commission’s possible. This is critical when investing
in the volatile world of penny stocks. Another important consideration
is the restrictions a broker might have on penny stock trading.
Avoid brokers that don’t allow trading of securities on
the Pink Sheets or OTCBB, have minimum or maximum trade volume
limits, don’t allow ...More
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Margin
Accounts
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The basic idea behind margin investing is rather simple. Rather
than having to put up all the cash needed to buy a stock, an
investor can pay only part of the price and borrow the rest
of the money. Typically the interest rate on a margin loan is
much lower than someone would pay on a credit card for example,
because the money that is loaned is secured by the existing
funds in the account. Interest rates on margin loans can vary
by as much as ...More
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Full Service or Discount Broker? |
A full-service broker provides a wide variety of services from
personal advice and research to retirement planning a tax advice.
They provide a variety of services, such as personal advice,
retirement planning, and tax tips. All these services are substantially
more expensive compared to ...More
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Types of Trades |
There are many different transactions that you can request when
trading stock online or over the phone. Here is a list of some
common order types: ...More
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P/E Ratio
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P/E is the ratio of a company’s share price to its per-share
earnings. You calculate P/E by taking the current stock price
and dividing by its earnings per share (EPS). Note: Earnings
per share can be found in the company’s financial ...More
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Selling Short |
Selling short, short selling, or “shorting” is an
investment strategy where an investor speculates that a stock
will go down in value. It is the sale of a stock that you do
not own. When you sell short a stock, your broker will lend
you the stock from either the brokerages own inventory, another
of the firm’s clients, or from another brokerage firm
altogether. The stock is sold immediately and the proceeds are
put into your account. Eventually you must buy back the same
number of ...More
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Technical
Analysis of Penny Stocks
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Technical analysis is a method of analyzing stock statistics
based on market activity, past prices and volume. It is a method
to look for patterns and indicators on historical stock charts
that will determine a stocks future performance. Most technical
analysts believe that stocks move with very predictable trends
and ...More
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OTCBB vs. NASDAQ |
The OTCBB is a quotation medium for subscribing members, not
an issuer listing service, and should not be confused with The
Nasdaq Stock MarketSM. OTCBB securities are traded by a community
of Market Makers that enter quotes and trade reports through
a highly sophisticated, closed computer network, which is accessed
through Nasdaq Workstation IITM. The OTCBB is unlike The Nasdaq
Stock Market in that it ...More
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OTCBB Due Diligence |
This is a list of information that companies commonly need to
provide to be listed on the Over the Counter Bulletin Board
(OTCBB):...More
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OTCBB vs. Pinksheets |
When a company is reporting and files with the SEC, information
and audited financial statements are made available to the public.
Access to this information helps the public evaluate...More
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Penny Stock Fraud |
Things to look for when examining the viability of a penny stock
...More
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Penny
Stock Fraud - A Common Example |
A company goes public and the company’s stock promoter
issues himself millions of shares at no cost, or just fractions
of a penny. A prospectus is then prepared containing all the
“facts” about the stock offering.
...More
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The Role of a Market Maker
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A "market maker" is a broker-dealer or bank that stands
ready to buy and sell a particular stock on a regular and continuous
basis at a publicly quoted price.
...More
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