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“Penny stock” is an established term that still hangs on, even though there is no longer any such thing as a stock share costing only one penny. Penny stock refers to any stock that costs less than $5 (US) per share. These stocks are so nominal for a reason why - the companies are incredibly huge risks to invest in. How to trade penny stock? Very Thoughtfully. It is about the most speculative stock available legally.

Many beginner investors are attracted to penny stocks due to the low price and potential for fast growth which may be as high as several hundred percent in a few days. Similarly, aggressive loss can occur and many penny stocks lose all of their value in the long term. Accordingly, the SEC warns that penny stocks are high risk investments and inexperienced investors should be aware of the risks involved. These risks cover limited liquidity, lack of financial reporting, and scams.

Do your research in advance of you invest and avoid “pump and dump” email scams. Find great articles and other resources for online stock trading at www.5starideas.com.