What happens to the stocks that are only worth pennies?
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mack
Apprentice
Joined: 12 Jul 2006
Posts: 3
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 Posted: 08/23/08 - 05:52 Post subject: |
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| Good evening everyone. My name is Alex and I would like to ask you something about penny stocks. I heard of them, but I am not quite familiar with the term. Can you tell me what penny stocks are? What happens to the stocks that are only worth pennies? Thank you for your posts. |
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axel
Apprentice
Joined: 23 Apr 2008
Posts: 2
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| Posted: 09/22/08 - 01:12 Post subject: |
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| Hello there Alex. Well, here is what I can tell you about this subject. Penny stocks are those stocks which are worth less than five dollars a week. They are usually traded on the over-the-counter markets, by some special services. Those can be OTCBB or Pink Sheets. These stocks are usually traded in large quantities, sometimes even hundreds of millions. These stocks are of very low liquidity so their price can change pretty much with the slightest change in supply and demand. That’s why they are very risky. Problem with these stocks is that they can be used for many frauds. Therefore, they are not very popular with investors. Well, that would be all from me. I hope that I was of some help to you. Bye! |
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