Penny Stocks - the Secrets to Success

Author: Ron kaye

Information and timing are the most important things for an investor. These two aspects of investing become more important when penny stocks are concerned. Penny stocks are renowned for their 201Chigh risk, high reward,201D as the adage goes, but then it takes a lot of effort on the part of the investor to know and understand which penny stocks would be worth the risk. Since a penny stock is priced very low, its standing in the market usually is not determined by market capitalization or the manner in which it is listed.

In the United States, penny stocks are traded Over the Counter (OTC) and the standard institution on security exchange, the SEC (Security Exchange Commission), issues adequate warnings about the risk involved in trading with penny stocks. Since these are small shares of small companies, their information can be very challenging to obtain and they can be easily manipulated. In the United Kingdom, penny stocks or penny shares are protected by a mandatory risk warning. In countries like India, penny stocks are known as small cap stocks and though the OTC mode of trading is not really in vogue, these stocks usually find a substantial number of investors. This is because the reward is very high. The investors who have proper knowledge and logical speculation usually ride high with such penny stocks all over the world.

About the Author:

Ron Kaye is an editor for www.Stocks-Reporter.com, an investment website that publishes articles, news, and reports, and shares information on undervalued penny stocks.

Reporting undervalued penny stocks!

Article Source: ArticlesBase.com - Penny Stocks - the Secrets to Success