Where To Trade Penny Stocks

Where To Trade Penny Stocks – In the next article we will explain how to trade penny stocks, how to find the best penny stock shares and what are the advantages and disadvantages of penny stock trading.

A mutual fund is a deposit that is sold for a few “cents”, that is, for a few “money”. They often own shares in bankrupt or bankrupt companies. In Germany, any stock that is worth less than one euro is considered a penny stock. First of all: trading in these shares is very risky and can result in total loss. Therefore, when trading penny stocks, only “play money” should be used, if not a manageable amount that the investor can use without risk. Identifying promising stocks is like finding a “needle in a haystack”. We’ll look at how you can do this and what you should consider.

Where To Trade Penny Stocks

Many investors believe that a stock that costs only 20 cents can double to 40 cents more easily than a stock that costs 20 euros and has to go up to 40 euros to increase its price +100% . However, this is a misconception in most cases. Studies have shown that stocks that are down are no better than stocks that are overstocked. As a rule, weak stocks, including penny stocks, underperform. Sometimes the trading volume in a stock dries up completely, so there is hardly any trading and the bid and ask prices are miles. However, stocks that trade in average cents often experience price volatility that skilled traders can use to make money in penny stocks.

Penny Stocks Auswählen Und Handeln (mit Bildern)

Less than 1 euro per share does not represent an almost worthless company. Especially in countries such as England, Australia or Hong Kong, even large, healthy companies are listed in the price range that is considered “absurd level” in that country. For example, telecoms giant Vodafone (ISIN: GB00BH4HKS39 – Symbol: VOD – Currency: GBP) is listed on the London Stock Exchange at 138 pence, just 1.38 pounds – above its stock mark. penny. The reason for this is the number of shares, which is around 27 billion. Despite the low price, the company is worth around 37 billion pounds, which means around 43 billion euros. Australian company Alumina (ISIN: AU000000AWC3 – Frankfurt symbol: AWC – currency: AUD), the world’s largest producer of aluminum and bauxite, is more than a penny stock, with a price of AUD 2.55 ( EUR 1.63) Yes, but three to four years ago it was less, for example – the company has no problems.

Also for Alumina, the majority decides that the stock market value is more than 7 billion AUD despite the low price. The general price level is often related to the stock culture or stock laws of the country. While in some countries it is possible to easily increase the capital at the rate of a few cents and “decrease” the corresponding capital, in Germany the minimum rate is set at 1 euro . This is why only German shares are listed under the 1 euro symbol, which – without the so-called reverse distribution, that is, the merger of shares – can no longer redeem itself through stock market fundraising. So we can confidently say that many German penny stocks are worthless or junk stocks

In the United States, a stock priced at $5 is also called a penny stock. Because if you want to be listed on a major US regulated stock exchange such as the NYSE or Nasdaq, a minimum price of USD 5 is required. This is because stocks under US$ 5 are often listed and available. sold over the counter (OTC = “over the counter”) “pink paper”. Pink Sheets is the over-the-counter platform of private bank Pink Sheets LLC for OTC trading in the United States. Because information and transactions about these stocks are recorded on pink paper, the name “pink pages” arose. To trade there, registration with the US Securities Authority SEC or minimum regulatory requirements such as disclosure requirements must not be met. Investors and traders buy the proverbial “pig to pig”, because not all information is verified and therefore not reliable. However, prices fluctuate, so pink stocks are considered a very risky gamble and invite fraud. Coincidentally, the market sector is famous for Jordan Belfort, the “Wolf of Wall Street”, because his scams completely affected this part of the “Wild West” market. Leonardo DiCaprio played the role of a penny stock promoter in the Hollywood film adaptation.

Many stocks listed on stock exchanges are pure “shell stock exchanges”, i.e. the remainder of an involuntary public limited liability company without the possibility of final payment or returns of related companies. Stock trading often continues in the stock market, even years after bankruptcy. On the one hand, unscrupulous investors realize their losses and deduct them for taxes and on the other hand, banks and banks receive commissions on all transactions.

Beginner’s Guide To Trading Penny Stocks In 2020

Sometimes, some bad stocks experience price fluctuations, especially when many traders bet on the rise at the same time and announce it on Internet forums, for example. A moderate increase in trading volume often attracts more gamblers, so there can be a huge demand for a security that has “seemed dead” for years. In the business world, such a provocative price increase is also called “white dead cat”. In a somewhat ironic analogy, even a dead cat will come back if it falls from a height. There is an English saying “Even a dead cat bounces when thrown from above!”

Especially in the period of boom in the stock market, there is an abnormal increase in penny stocks, which often “goes through town” in one argument. In fact, experience has shown that such speculation is a clear sign that the stock market or a sector has become overvalued and that the risk of correction or market rise increases every day. Because there is often nothing but hot air behind many stock tips or bullish stocks, the price of a penny stock that was built on a gamble will collapse as quickly or even faster. In the case of penny stocks, they are “the last to eat dog”, because often such shares do not move for many years, constantly tilt, rarely sell and become worthless. Delisted – ie removed from the stock market.

In each case, the shell company of the walled company can give other companies the opportunity to go public and thus represent an IPO (public offering). A company that wants to avoid the complicated and expensive process of an IPO can, so to speak, hang up its coattails and take itself to the capital market through a “backdoor listing.” However, this is often only effective when the depositor is new. The company initially manages to get the most shares at the cheapest price (for example from a large investor in a package for a few cents per share). Through various capital measures such as reduction of capital and increase of capital (new company), AG is adjusted from time to time.

So-called shale speculation, which is the expectation that some shale is scheduled to move again on the exchange, is considered by investors to be a standard form of penny stock trading. If the correct guess works, there are often wins that are many times the stake. However, the risk is that the AG’s business and position will not change and the listing will eventually be discontinued for cost reasons. Of the many shells available for exchange, experience shows that very few are actually used as shells. A shell contract is the best option if a large investor holds a large share, as the capital requirements can only be met with a large share. However, it is especially difficult to find the owner’s configuration in the case of a stock that is in trouble, because it has often changed a lot since the last mandatory release.

Famous Companies Traded As Penny Stocks

The most successful example of an exchange listing through a shell company is Berkshire Hathaway (ISIN: US0846707026 – Symbols: BRKA, BRKB – Currency USD). It was originally a bankrupt textile company used by Mantel Buffett in 1965 to gradually build up his holding company with more than 70 properties – the rest is now business history, with +1 stock ,65 million percent to date (!) About 300,000 USD. An example from Germany is Elling Klinger (ISIN: DE0007856023 – symbol: ZIL2 – currency: EUR), which used the shell of the former ZWL Grundbesitz Ziegelwerke Ludwigsburg, or TAG Immobilien AG (ISIN: DE0008303504), which is currency: EUR. The history of Tegernsee-Bahn AG is on our website.

Above all, penny stock recommendations on certain topics often result in penny stock price considerations. For example, as the legalization and release of marijuana for medical or recreational use has become a political issue in many countries around the world, many bankruptcies and bankruptcies have resulted. the real boom (see the article: Best Marijuana Stocks of 2019). ). Deutsche Cannabis AG (ISIN: DE000A0BVVK7 – Symbol: FAM1 – Currency: EUR) investment company for companies in the cannabis industry – formed at the beginning of 2017.

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