| Penny stock investing is one of those professions | | | | want to look at the balance sheet of the company |
| where your always on the edge of you seat, I | | | | as well as the history of the companies SEC filings. If |
| imagine someone in the world series of poker feels | | | | the company is a pink sheet stock, then you will |
| the same way. Except we feel this every time we | | | | have no filings and the process becomes even more |
| have money in a trade. In this market, investors can | | | | difficult. |
| attain huge gains quickly, but they can also lose all | | | | Share structure is a main issue when penny stock |
| that profit in the blink of an eye. Some who trade in | | | | investing. If the stock is at a price you like and you |
| the otcbb market make a living with this "wild west" | | | | notice that the float (how many shares are currently |
| style of trading. Others will lose their trading capital as | | | | being traded in the market) is low this is a great sign. |
| they make poor choices on stocks. | | | | You are not finished yet though. You must look at |
| When investing in the penny stock market, you're | | | | the authorized shares (how many shares the |
| buying low priced shares of a company hoping to | | | | company can add to the float without filing) if the |
| make a big splash in the corporate world. Often | | | | authorized shares are much larger than the float then |
| these companies have a product or idea that makes | | | | the company can add more shares to the market. |
| sense and investors can easily see why the future of | | | | This becomes a supply and demand problem. With |
| this company looks bright. In the stock market, it's | | | | more supply the price drops. Sometimes the price will |
| not all about products and dreams though. When | | | | drop dramatically. |
| buying penny stocks you need to look at the future | | | | When trading these otcbb stocks, you must |
| outlook of the company from a business perspective. | | | | understand that the company needs to survive. They |
| If you buy penny stocks with weak structure this | | | | will dump the shares into the market to create |
| could mean the loss of your whole investment. There | | | | capital. When the price becomes to low and the |
| are many ways to check the structure of a | | | | authorized shares are at the point where they are |
| company in the penny stock market but with these | | | | running out, the company can reverse split. Then you |
| smaller companies there are often hidden issues that | | | | will lose many of your shares and the process begins |
| are not highlighted in the latest press releases. The | | | | again. If you buy penny stocks, you also want to |
| first thing to look for when investing in penny stocks | | | | ensure the company does not have a history of this |
| is the share structure of the company. You will also | | | | behavior. |