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penny stock investment
Penny stock Investment are stocks of those companies that trade with a share price that is below $5; however, often penny stocks can be less than $1, as the name suggests. The extremely low share prices allow an investor to hold thousands of shares for a relatively small amount of invested capital. With that scale, the gain of just a few cents per share can translate into sizable percentage returns; however, it is important to note the reverse is also true, of course. These stocks are traded on regular exchanges such as the Nasdaq. However, major stock exchanges, such as the NYSE and Nasdaq, have special listing requirements. For example, according to Nasdaq Rule 5550(a), failure to have a minimum bid price of at least $1 per share for primary equities will result in being delisted.
Like every other trade, the first thing you need to do when it comes to penny stock investment, if find a good brocker to help with your investments. In finding a brocker, the fees and commissions are necessary area to pay close attention to. Different brokers have different fee structures, you need to scan for one that will not greatly affect your final returns seeing as each share of penny stocks may not bring such a large return. There are brokers for instance who charge per share basis, and if you apply that to this investment type, it will not make much sense as you will not get the returns you are aiming for. True to their name, these stocks are traded for less than $1 and $5, which means that even you are buying many pennny stocks, which brocker you will choose is important.