Penny stocks?

[bubbadu]

Penny stocks have always interested me.... obvisously there is a lot of risk involed, but I was just wondering if anyone has ever dealt with them. I have always wanted to get into the stock market in just a small way and was thinking about buying a small amount of stocks.. if anyone has any tips let me know.

 

[imported_Mike]

obviously, never put in more than you are prepared to loose.

 

[Looney]

Well, even with penny stocks, you have to buy enough to make the brokerage fees worth it. I'm not too familiar with the online services available in the states, but if you're paying $50 for brokerage fees, it wouldn't be worth it to buy $100 in penny stocks.

 

[bubbadu]

Yeah I was only thinking of putting maybe a 100 bucks... I remember hearing something about buying in "blocks" of like 100 shares... if it was only 30 cents a share, that would only be 30 bucks for 100 shares. Back in high school, I always used to follow the market, but never had the money to get into it. Now that I have some extra money, I was thinking that this would be a cheap way to try it out.

 

[bubbadu]

Originally posted by: Moralpanic
Well, even with penny stocks, you have to buy enough to make the brokerage fees worth it. I'm not too familiar with the online services available in the states, but if you're paying $50 for brokerage fees, it wouldn't be worth it to buy $100 in penny stocks.

Yeah thats what I figured would kill the deal... it wouldnt necessarly have to be penny stocks, it could be like 2-5 dollar stocks instead. But once you factor in the fee's, I could see how it would be tough to make any money.

 

[Evadman]

A penny stock is usually concidered anything under $5 a share.

 

[Shockwave]

Nice thing about cheap stocks, small moves equal larger moves of more expensive stocks that you have less shares of. Its all equal in the end.
I know Scottade charges 12 bucks for unlisted stocks (Less then a dollar) and 7 for listed stocks (Above a dollar). Doesnt seem like much, but that extra 8 bucks from front to back has been the difference betwene losing and gaining money. Granted, small difference but hey, its the principal of the matter.

 

[BaboonGuy]

i classify penny stock as 1 dollar and below. they are gambles, dont buy one unless you personally KNOW the company.

 

[bubbadu]

Thats good info Shockwave. So it would be 7 bucks each time I would buy the shares? or just sell. As you can see, I am a complete newbie. And does Scottade offer online trading, and if so, is there a minuim depoist required? Thanks

 

[daclayman]

hehehehe anything under $5...... like Lucent, Nortel, Dynegy, etc. I think OP is considering OverTheCounters; the real man's stock market gamble. If you learn the new 'boiler room' speak on the numerous stock talk forums, I say take a chance. I've made and lost thousands. I believe the safer gamble is in the currently listed 'penny' stocks. It was even quoted today on CNBC: 'We usually call the 'stock of the day' the security that has the most volume. Since Lucent has been the volume leader for the last xx weeks, we need to choose the 2nd volume leader or a stock with 'news worthy' relevance (that's over a buck......). CNBC buttrammers couldn't call rain with a sky full of clouds.

use the force (and a good real-time level II quoter), Luke

 

[Shockwave]

Originally posted by: bubbadu
Thats good info Shockwave. So it would be 7 bucks each time I would buy the shares? or just sell. As you can see, I am a complete newbie. And does Scottade offer online trading, and if so, is there a minuim depoist required? Thanks

The transaction fee (7 bucks) is per transaction....Buy = 7, sell=7, thus 14 from start to finish with a stock
Scottrade is only online, although they have alot of local offices which is nice. Minimum to open an account is 500, no daily minimum (Means if you lose 400 and have 100, you dont have to bring it up to 500) so thats nice.
As for "penny" stocks I dig'm. RBAK took one hell of a jump (One I JUST missed by about 1 week), BCON had a nice bump but came down, few others I cant think of off the top of my head I've been following.

If you buy those 2 mentioned, your on your own. They have lost there promise for the time being to me.

 

[hawkeye81x]

Unless you know a good deal about the company I would not recommend starting out with penny stocks.
The risk is just way too high.
That is unless of course you are not adverse to that kind of risk.

From personal experience I've been burned too often when I first attempted investing in penny stocks.
I don't think I made a single dollar from any of them and this doesn't include the brokerage fee I had to pay.
Research and common sense are good means of investing... I just wish I had the balls to keep my money in Marvel Enterprises before it quadrupled...

Investing in a level II quoter might not be such a good idea if you're paying a hefty fee (say $10/month) just to move around a couple hundred dollars worth in penny stocks.