Before even thinking of buying penny stocks it’s probably a good idea to understand what they are and how they’re viewed by the investing world. Three basic categories of penny stocks are used to define the actual words. Each one has a separate meaning with entirely different investment potential, risk ratios, and trading strategies. You might already know one of these meanings, however if you are doing research or talking about trading with another trader, you need to be careful because the information could be referring to an entirely separate meaning. Therefore, you must understand each meaning in order to make sure everyone is talking about the same one.
True Share Value – When people who do not know much about investing hear “penny stock” this is what they assume is the meaning. This is when a penny stock is valued under a dollar. Usually people believe that the stock is only valued at one cent. This meaning is not used very often in publications, probably due to the fact that it makes perfect sense. If a trader is speaking of a stock that is traded on a major market, such as the NYSE, then it is typically worth no more than $5.00 for each share.
The Stock Market Exchange – On occasion, and in particular with penny stock brokers, the meaning of penny stocks is derived from the market on which the stock is traded. The most prevalent penny stock exchange is Over the Counter, or the pink sheets. Basically, this means that the stock is not qualified to be on one of the more conventional markets. Pink sheets have started to examine penny stocks to make sure they meet their requirements for their exclusive penny stock market.
Market Capitalization – This is the final category of a penny stock and it is based on the company’s value. Usually, the companies have to be worth under $100 million dollars. The essential aspect is the company’s size, rather than the actual value and the price of each penny stock share.
Tags:
Buying penny stocks,
investing,
market capitalization,
market exchange,
NYSE,
penny stock brokers,
pink sheets,
risk ratios,
share value,
stock,
stock exchange,
Stock Market,
stock share,
trading strategies
Related posts
Posted in Getting Started In The Stock Market, Investments, Stock Market News | Leave A Comment »
Oh well, here we go again. After spending the last week or so losing 700 points and falling below 10,000 points at the close. Everyone feels that the stock market is on the rise again. Earnings season is upon us as a matter of fact we have Disney reporting after the close. I am pretty sure that they will not beat the street. Why is that? Besides the fact that I am a season ticket holder and have seen how much business they have lost in their Parks. Their latest movie, The Princess and the Frog, did not do as well as it was expected. They also have to take into account the fact that they bought Marvel Entertainment Inc.
To get back on my original thought, It seems that the media is talking about how this rally is “real”, I don’t think so. How can it when you have sales down in many business’ and people are still losing their jobs. Look before you leap back into any stocks at this time. Yes, I know the markets have corrected themselves in the last week or so, but isn’t that what we were saying a year and a half ago? History has shown us that there is always a second bounce. It’s my opinion that we will see the second bounce some time in the first half of this year.
I’ve been sitting on the sidelines for the last few months when it comes to actively trading on a day-by-day basis. I did make some acquisitions of some stocks like Ford (NYSE: F), as well as Apple (NASDAQ: AAPL). Those trades were made for the long haul since I do have confidence in those companies and the people running them. I’m going to continue to wait for the other shoe to fall before I get back into the day trading. My advice to you is to do the same, but then again who am I?
Do what you may ,but consider yourself warned.
Happy Trading.
P.S. If you’re looking for some help in the stock market, Try out a free trial of Jim Cramer‘s Action Alerts from The Street.
Tags:
Earnings report,
NYSE,
Stock market for beginners,
Stock trading,
trading stocks
Related posts
Posted in Getting Started In The Stock Market, Stock Market News | Leave A Comment »
I’ve been busy this week with many things, so keeping an eye on the stock market hasn’t been easy for me. Well this afternoon I’ve had the time to see the progress for the past few days and I’m amazed at the gains that have been made this week by the major indicies.
.
I told you in a recent post that I jumped out of basically everything until the markets correct themselves again. We’ve had too much of a run up and I’m skeptical. Looking back on the past few days that I missed, I noticed that there were good opportunities to make money on stocks that I sold and they went on a roller coaster ride afterward.
.
The one I want to talk about is Agnico-Eagle Mines Ltd. (NYSE:AEM), a stock that was as high as $62 only five weeks ago. I made the right choice to sell off my position. After it corrected by 10% I bought a small position back. I let it just sit there not bothering to pick up more as it continued to drop. Unknown to me, I wasn’t paying attention to what the stock did this week as it dropped down to below $47.50. If I was aware of the situation, I would have back the truck up so fast to grab shares at that price. That was Monday morning and now the price per share is $55 (as of 3:45pm). A 16% gain in just three trading days.
.
In all the times that I’ve traded AEM, I’ve always made money. This would have been great to profit from, but I’m not going to drive myself crazy because I didn’t get into this play. There will always be more opportunities to make money, but if you want to stay sane while trading stocks, you can’t sit there and think of the “what if’s”.
.
Agnico Eagle has been trading within a range of $45 to $60 (which is a nice swing gap) this entire calendar year. When the price drops below $50 I buy quite a bit, as it goes above $55 I prepare to sell. This week was a good opportunity to do exactly that and I’m OK with the fact that I missed it.
.
Try to keep that in mind as you go through your portfolio.
Tags:
Economy,
Getting Started In The Stock Market,
How to make fast money,
Investments,
NYSE,
Stock market for beginners,
Stock trading
Related posts
Posted in Fun With Investments, Getting Started In The Stock Market | Leave A Comment »