Stock trades involving amounts less than $1 are what we call penny stock trades. This trade is considered a high risk high gain business because of its poor liquidity, large spreads, and with but low capitalization. Another advantage of penny stocks is their volume. For a fact we know that it is easier to make trades on stocks with considerable volume rather than those which are scarcely available in the market.
In wanting to find the best penny stocks out in the market you need to collect the balance sheets and income statements of each penny stock in order to determine whether the stock is growing over the years or better yet make sure that it is not on debt. Secondly, go with stocks that have great business plans. Don’t be fooled by advertisements of companies that offer great services and products but do not come with a credible business plan. Then you also need to determine the underlying industry that each penny stocks belong. Investing with industries that are stagnant or failing adds risk to your business. But don’t’ discount everything just yet. With sufficient research you can still generate income out of these industries. Lastly check on forums and reviews on the net. Specific information of each stock that you want to know may readily be available on the web.
One more important thing is that you need to know where to buy penny stocks. It is strongly advised that you look for brokers online and take note of commissions and fees because these factors tend to eat up your would be profits. Top three on my list are Scottrade, TradeKing and OptionHouse. We shall now discuss why these three are highly recommended online brokerage firms.
Scottrade – This Company maintained very good reputation for over 25 years now. Scottrade has been hailed the leader in stock brokerage industry and is also hailed as a leader in customer service. They charge no unnecessary fees and have low commissions.
TradeKing – This online brokerage firm has been awarded with the highest rating of 4 Stars in the Barron’s 12th Annual Survey for Browser-Based Online Broker. TradeKing specializes in options trading, mutual fund investments, retirement accounts, and stock investments. They also provide fast trading transactions, retirement education and great customer service for all their clients.
OptionHouse – It is a newcomer in the industry of brokerage but despite that it has already been voted #1 in stock options trading and trade experience in Barron’s Survey of 2009. Their prices and offers are also already comparable with that of TradeKIng.
In order to secure a penny stock with high potential in profits and revenues take time to find the best ones and analyze it thoroughly before buying it. Business never has any room for slacking off, even just a bit. If you need any additional or supplemental help trying to find and buy any type of penny stocks, it’s best to first seek out a financial or investment advisor before putting your money as risk before it’s too late.