July 8, 2021
This Penny Stocks Guide will help you understand everything you need to know about penny stocks. Penny stocks are traded outside major market exchanges for a significantly low price and thus have a small market capitalization. Because of its volatile nature, these stocks offer high risk. However, it also means that you can generate more money in a relatively short span of time. Penny stocks are often traded over the counter using pink sheets or OTC Bulletin Board.
Penny stocks are a more appropriate choice for investors who can tolerate a high risk. The higher levels of risk mean investors should take necessary precautions before making a big move. For instance, investors must have a stop-loss order predetermined before becoming a part of the trade. This way, they will know what to know in case the market does not move according to their intended direction.
While penny stocks offer many opportunities to make good money, you need to have realistic expectations. Keeping your expectations in check is important is because stock market gains can take months and years to materialize. If you’re a beginner, it’s imperative you have realistic goals for your investment.
What Is Over The Counter Trading?
Over the Counter (OTC) trading is when stocks are traded using a dealer as opposed to the centralized exchange. OTC does not involve formal exchanges including NYSE MKT, Toronto Stock Exchange, and New York Stock Exchange.What Are Popular OTC Networks
Popular OTC market groups have some well-known networks including- Pink Open Market
- OTCQB Venture Market
- OTCQX Best Market