The Best Penny Stocks And How They Work

Penny stocks basically refer to common shares mainly owned by small companies, and they are also very volatile as well as high-risk investments. They are also a means that you can be able to easily obtain wealth. However, it is very important as an investor, to do pretty much research on the penny stocks before going ahead to invest, especially if you want quality stocks under $5. This is because the stocks may fluctuate from time to time. This article, however, reviews the best penny stocks to consider investing in, whether in finance, lands, agriculture, energy, among others, as well as how you can effectively benefit from the stocks.

Description- Factors to Consider when Trading in Penny Stock

Getting the best penny stocks to trade in the market can be quite difficult and yet very simple on the other hand. If you do good research and investigation on stocks, then it is very easy to get stocks that can benefit you. There are a number of factors to consider when trading in stocks such as;
Type of company to invest in: It is very important to look at the companies that have the ability to gain market share and revenues. It is also very important to consider a company that has a sustainable trend.

Small companies with potential: When you invest in small companies with great potential, you can be sure of getting profit from the penny stocks you invest in.

How Penny Stocks Work

As an investor, it is very important to know how penny stocks function, such that you can be able to benefit from them. Stocks functionality is very easy as it involves basic trading (buying and selling) of stocks. Companies will generally sell portions of their ownership to investors, such that they can be able to raise money from the public. As shareholders, you will be able to benefit when the price of the products goes up. It is possible to buy stocks at a low price and then sell at a high price. You can also make money even when the price of the stocks is down, also known as short-selling. Companies will pay promoters to promote their stock.

Types of Penny stocks

There are many types of penny stocks in the market, depending on the type of investment that you want to do. Many people trading in penny stocks often fail to realize the specific type of stocks to buy and sell. This also causes people to buy the wrong stocks at the wrong price, and hence end up losing lots of money. There are different types of stocks such as;

Paper trading- This refers to keeping track of the trades in real stock by using a piece of paper and a pen and also using a portfolio of virtual money.

Metal lottery tickets: This refers to cryptocurrency such as dark coin, bitcoin, among others. They are also a means of investment that can generate profit.

Best Penny Stocks to invest in

We reviewed a number of penny stocks that investors can trade in, among the many stocks that are in the market, and this is what we came up with. Some of the best stocks to consider in 2018 are such as;

Zix Corporation: This is an email provider company within corporate as well as government agencies. It’s sales have risen consistently within the last five years to a high of 65%, making it at the top in range. From time to time, you can also expect the market share to rise beyond $5 per stock.

Glu Mobile Inc (GLUU): As a gaming platform for mobile games, this is also a small company that is really gaining revenue from its income as one of the top selling stores for games with the biggest title on the market. It has a market capitalization of more than $550 million.

Arotech Corporation: Arotech is a company that deals with the technology used by the military as well as the law enforcers. It is mainly involved in the creation of drones and virtual reality. Since the technology it uses is being deployed at a high rate, this makes it highly marketable in shares and revenue

Benefits of Penny Stocks

There are a number of benefits that come with trading in penny stocks, only if you do the right consideration when trading, such as;

– Cheap in cost: The penny stock is very cheap, hence making them very affordable and easy to buy in large quantity.

– Manipulation: Manipulation of the penny stocks is much easier with the fact that they are cheap. This will also depend on the amount of capital that you have as an investor.

– It takes less capital to move stock

Limitations

– Trading in stocks is risky: There are a lot of risks which are involved when it comes to trading in the stock, including losing your investment.

– The company you invest in may be delisted off the market: There is a risk of companies being delisted off the market, especially due to bankruptcy.

Conclusion

If you are an investor and looking forward to trading in penny stocks, then it is very important to factor in considerations and knows what you are getting in. The penny stocks business may be very profitable, but at the same time very risky, depending on the market. However, high chances are that you may gain and earn a good income if you consider some of the best penny stocks as listed in this article.

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