How does a penny stock work ??

Answer 1

not very well cause they have limited markets and are notoriously known as boiler room stocks . Liquidity is also hard as they are not on any exchange . Bid and offers swing widely also . Bad investment !!!!!!!

Answer 2

I'm making good profit with penny stock, check here http://penny-stock.keysolve.net
Many new investors are lured to the appeal of a penny stock due to the low price and potential for rapid growth which may be as high as several hundred percent in a few days.
Similarly, severe 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 new investors should be aware of the risks involved but you can even make very big money. These risks include limited liquidity, lack of financial reporting, and fraud. A penny stock is a common stock that trades for less than $5 a share. While penny stocks generally are quoted over-the-counter, such as on the OTC Bulletin Board or in the Pink Sheets, they may also trade on securities exchanges, including foreign securities exchanges. In addition, penny stocks include the securities of certain private companies with no active trading market. Although a penny stock is said to be "thinly traded," share volumes traded daily can be in the hundreds of millions for a sub-penny stock. Legitimate information on penny stock companies can be difficult to find and a stock can be easily manipulated.

Answer 3

Here's how it works:

First you get a list of thousands of fax numbers and e-mail addresses. Preferrably the list contains a high percentage of suckers.

Next you buy a whole bunch of XYZ stock for $0.30 per share.

Next you send out thousands of faxes, emails, and any other cheap advertising method you can think of. You say things like, "THE NEXT BIG THING!!!" "THE NEXT MICROSOFT!!!" "YOU CAN'T LOSE ON THIS ONE!!!" and so-forth. Capital letters and exlamation points are a must.

When the suckers start buying and the price hits a dollar or two, you sell out.

That's how it works. :)

Usually those companies are in bankruptcy or are simply not very profitable companies, or they wouldn't be penny stocks. You are not likely to make much (if any) money if you don't like the idea of doing the above. If you buy into those faxes and e-mails, you're almost sure to lose money. Try roulette.

Answer 4

Penny stocks are mostly scams. They are companies with no assets usually and just trade no reason, they mostly don't move in value. But like someone else said, people send thousands of emails or faxes out and if only acouple of those people buy then the stock might go from $.30 to $1.50 and make someone money.

Answer 5

A penny-stock denotes a worthless stock and is usually a traders favourite where unscurpulous traders manipulate its movements to con/ cheat innocent investors and steal their money. They buy large amounts of stock over time, float false rumours/ good news about the firm and as other people climb on the bandwagon to get a piece of the action they offload their entire holding and make a neat killing. This process is repeated several times over till the SEC takes note and suspends the stock.

Answer 6

One a Penny Two a Penny Hot Penny Stocks
By: Maureen Cook

This article is a good starting point...plus you can research the companies listed to get more insight!

Gooooood Luck

Answer 7

'Penny stocks' means low priced but publically traded securities. They are neither inherantly good, nor inherantly bad, but many are small, 'unseasoned' companies are quite risky investments. The NASD rules prohibit or limit the extention of margin loans on stocks that trade for under $4.00 per share because of this higher risk. Also they tend to be quite volatile, because there are usually fewer shares available to trade. Most 'penny stocks' trade in OTC markets, where one or more market makers make two-sided markets (i.e., they will buy or sell shares per their quotes).but some trade on the AMEX or other exchanges.

Answer 8

There is a penny stock market. These are smaller companies raising east money.

Answer 9

Ehm..
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Bye Bye

Answer 10

It's the same as any stock, except it's not on a major stock exchange. It's a risky investment, and most people lose money. You might consider buying mutual funds.

Answer 11

It usually doesn't. It usually stays at the same price for a long time.

Only rarely will one go from thirty cents to $5.00 in a month.

I own a stock called Cygne Designes (CYDS) which is now around $2.00 a sahre.

I had it for years, and it stood around thirty cents until last year.

I sold most of it around $4.50 a share. I still own a few shares just in case it wants to go back up again.