How to Analyze Penny Stocks / Investing for Beginners
Penny stocks are stocks that are usually priced under one dollar a share and are thinly traded, which can make them a challenge to research. Penny stocks don’t have the same reporting requirements as stocks listed on the major exchanges, nor do they have the same regulatory oversight. Penny stocks are notoriously volatile, and daily price swings of 20 percent or more are common. Conducting a thorough analysis can help a trader find a penny stock company worth the investment.
Select a sector or industry that’s in an uptrend across the market.
Penny stocks don’t lend themselves to short trading because of their small stock price. Many are thinly traded, and investors getting caught in a short squeeze will have a difficult time selling due to a lack of buyers.
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