When Is It Advisable To Hire A Penny Stock Trading Broker?
Penny stock trading is more complicated than it sounds. You can do it by yourself by opening a trading account at a reputable brokerage firm, or choosing a penny stock broker with a good commission structure. Hire a penny stock broker when you feel overwhelmed and are just not picking the right stocks. These brokers can find penny stocks with the best rates of return and at the lowest risks. Contact a penny stock trading broker for advice, but a professional will not take over you portfolio if it is only based on penny stock trading. Learn everything you can from this middleman until you feel confident enough to trade over the phone on the internet.
Look on the NASDAQ National Market website to find over the counter penny stock markets. Penny stocks are not traded through the stock exchange but through side exchange sites. You will need to have a good penny stock trading contact or broker to navigate through trading. When you engage in penny stock trading you will pay the asking price or what the seller considers fair value. This may not be the real value of the stock and can be inflated. Use a broker to calculate your earnings from the selling prices versus the real price.
Do be aware that penny stocks are high risk investments and may lose value over a period of time. They can, however, double or triple their value in the short term. Penny stocks usually belong to unsecured and new companies so they do tend to have less backing and liquidity; this makes them risky.
Use a broker if you are planning on trading or buying stocks in groups of one hundred. These groups are sold by market makers and are organized similar to an auction. You can always back out if prices get too high for your investment ceiling.
One excellent penny stock trading broker is Zecco Trading that allows a number of free trades on a monthly basis and subsequent trades are only $4.95. The business model of this broker includes revenue from website advertising, good reviews and high client satisfaction. Try TradeKing to take advantage of their profit and loss calculator. There is no minimum account size and they are backed by Lloyd’s of London. One of the better known penny stock screener brokerage houses is Scottrade which has a minimum account size of $500 but no inactivity fees. Use ShareBuilder with low commission structure and automatic investing for $4.00. No account minimums at this broker.
When trading in penny stocks, consider day trading penny stocks as a good way to make quick profits. Day trading is an attempt to capitalize on short term fluctuations. Buy a penny stock at $1.00 and it rise to $1.15. This is a 25% profit. Day trading requires checking the prices several times a day, having patience, and developing a strong stomach. Follow the advice of a broker to find the best penny stock picks to give your day trading a beginning point. Just remember that in penny stock trading you will need a little luck, a great deal of patience and the persistence to take profits as they come.