How to trade A Penny Stock

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Do you know how to buy and sell Penny Stock? Chances are you do. If you know how to buy MSFT or GOOG then you’re set – because the actual process is the same. You fire up your web server, such as E * TRADE or Scottrade, look up sign and execute the transaction. Sala is the same too. Open site broker, like the shares in your portfolio and carry out the business of selling stock.

So, if it’s very easy, it is this article about?

There are a few differences between buying and selling Penny Stock compared to traditional stock.

First, not all penny stocks listed, or short, the online broker. Because there is significantly more risk carrying penny stocks, some online brokers do not list them all. You may find a good Penny Stock you want to invest in, only to find it is not listed with a broker.

To compensate for the risk, some online brokers charge more fees on top of the transaction fee. This is usually a percentage of the value of a transaction or a fixed amount per share. For example, to trade micro stock ABCD, which is valued at $ 0.01, the broker may charge you 0.5% of the total transaction value in addition to a $ 9.99 transaction fee. If you bought 10,000 shares, it would cost you $ 110.49 ($ 100 for the stock, $ 9.99 for the trading fee, and a $ 0.50 fee). These costs can add up as you add to your portfolio -. Especially if you trade in larger volumes

Each server has its own rules, but many pressures on stocks valued at less than a dollar

also need to understand that sometimes sell (and even buy) position penny stock can be much harder than traditional stock. To buy stock, it will be outstanding shares available. To sell a stock, someone will be willing to buy. Sometimes, depending on the stock, it may be difficult for either condition to be true.

To protect themselves (and probably you) most online brokers have to put a penny stock orders as limit orders instead of the traditional market order. The limit orders that specify a price (a cap) that you want the stock to be ahead of the run. Because prices can fluctuate rapidly, chances are the price you see is not necessarily the stock is now. For example, let’s say ABCD is $ 0.01 and you want to buy it but do not spend more than $ 0.03 per share. You want to enter a limit order for $ 0.03 and commerce would perform as long as the price was equal to or less than three cents.

A limit order to sell works the same way. When the price reaches say $ 0.10, if you enter a limit order to sell at $ 0.10, the store would carry. Some brokers also allow you to specify a “small” team to sell (limit loss or stop loss). For example, if ABCD falls below $ 0.02, selling stock to cut your losses.

This is different from market orders executed on current market prices. Again where prices rise and fall more significantly, these measures are in place to protect you

I hope you have learned more about trading penny stocks – Happy investing and good luck

DISCLAIMER : .. I is not a licensed financial advisor, investment broker or analyst. I’m just an amateur trader gives amateur unbiased opinion and share with the community what works for me. Always use wisely invest and never invest more than you can afford to lose -. In other words, be prepared to potentially lose everything you invest

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