Sep 5, 2012

Posted by in Penny Stock | 0 Comments

Trading Red Hot Penny Shares

How Red Hot Penny Shares Can Make You Rich

Red hot penny shares can bring you exponential returns. Many people are unaware of the power in these low-priced stocks. They see the low value of each share and assume that this means that the stock is inadequate or incapable of creating gains. On the contrary, these stocks are made more powerful by their small size.

Penny stocks have very low share prices. In some cases, the price of such a stock is below one penny. These are known as sub-penny shares. The upper range for penny stocks varies, depending on who you ask. While many people call the one-dollar ceiling the natural limit for these stocks, others will classify certain stocks that may value as much as three or even five dollars as penny stocks.

What really distinguishes these stocks from other low-priced stocks on the market is their exclusion from the major indexes. You will not find these shares on stock exchanges such as Wall Street. Since the companies behind these stocks do not file with the SEC, they are not allowed to sell their shares in such markets.

Red hot penny shares can make investors very rich because of one mathematical factor. Imagine a typical investor with $50,000 to invest. He could purchase a very respectable stock for $100 per share or a penny stock for just 10 cents per share.

The next day, each of those red hot penny shares experiences a positive price fluctuation of five cents. If the investor had taken the respectable stock, he would have only earned a return of 25 dollars because he only had 500 shares. The penny stock, however, would have returned $25,000 because the investor was able to buy 500,000 shares.

Where to Find Red Hot Penny Shares

To buy these penny stocks, you must look in the over-the-counter (OTC) market. You should be advised about some of the possible dangers of engaging in this market. There is no oversight to protect you from fraud because only the major indexes provide that sort of protection to the transactions that take place under their aegis.

To buy these powerful stocks, you will need to deal directly with the seller. You will also need broker software that will permit this sort of trade. Nevertheless, the possible earnings make it worth the effort and risks when you trade red hot penny shares.

Comments are closed.