What are penny stocks and how do i buy them?

Answer 1

Why would you want to buy something that you do not even know what it is?

Answer 2

"Penny stocks" are stocks that trade for less than $5 a share.

How much are you willing to risk? Take half that amount and buy coffee beans from the supermarket. Flush the other half of the money down a toilet.

Then start "imaginary" trading of the penny stocks you are interested in, but only on paper. When your "imaginary money" is gone, at least you can have a coffee.

Penny stocks are a complete waste of your time.

Answer 3

How do you buy them? Very carefully and with the small change of your account. Most are cheap for a very good reason--they are worthless.

While you are looking, check out some of these: DGEN, EPLN, PTSC, WTMK, and ZNCM. They have some interesting features I had NEWCQ on the list until I realized they are talking bankruptcy. Again, sometimes they are cheap because they belong there. Penny stocks are pure speculation, so don't bet the farm on them, okay? Good luck.

Answer 4

The PC term for them now are called "speculative stocks"..You can get them from most brokers, I use Scottrade. Specs arent for wimps, I invest in some for pure entertainment, Ive made some good money though..

Answer 5

any stock that is trading at $5.00 or less. i buy like i buy all of them. i compare ROE to P/E ratio.

ROE= return on equity (net income divided by equity)
P/E= price divided by earnings

if everything else is OK with the company's financial

example:Asta Funding Inc. (ASFI) $36.26

net income=$45,765
equity= $184,262
ROE=25%
earnings= $3.36 a share
p/e= 10.79

this tells me that the company is undervalued at $36.26

ROE x EPS /2= buying price

25 x 3.36 / 2 = $42.00 a share

margin of safety= 57%

do this with every stock you buy,and you should do all right.