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Some Tips How to Buy Penny Stocks

by thomaswaugh

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As we know especially, penny stock is a stock that can be
traded at a very low price mainly between one and five dollars. It does not
trade within the major market exchanges like the New York Stock Exchange,
National Association of Securities Dealers Automated Quotation System (NASDAQ)
or the American Stock Exchange.

Although they sell mainly at one dollar, the shares may sell
for up to ten dollars depending on promotion and advertisement. They are
normally traded in small exchanges and over-the-counter markets through over
the counter Bulletin Board (OTCBB) and pink sheets

There are two main ways on how to buy shares. These are
either online or through brokerages.

Through Stock Brokers

Many stock buyers are ignorance about share market trading
which oblige then for depending on agents or stock brokers to act on their
behalf. They let them know how many shares they want, from which company, the
ticker symbol and the market the stock is trading on. Some agents do not
require any commissions. They make their money depending on the difference
between the bid and the asking price. This difference is called the spread. The
higher the spread, the more money both the buyer and his agent make.

The choice of a good broker is essential for a better
trading. Some brokers simply want to get rid of the stock without caring much
for the buyer. One should consider a trustworthy broker and their commission
fees. Another factor to consider is how much one needs to open an account with
them. Some brokers also charge for dormant accounts. It is advisable to also
find out if the broker you choose has any benefits for you. Some banks also
offer the service of buying and selling stocks.

Buying Penny Stocks Through Online

Another way on how to buy penny shares is over the internet.
The advantage of buying penny stocks online is that you have quick access when
you need to either buy or sell. This way the buyer takes the profit quickly
rather than calling an agent over the phone and asking them to seal the deal on
your behalf.

In order to trade online, one needs to sign up and open a
trading account. This account needs to be funded from the account holder's
bank. Once the account has money, the buyer then goes to the internet and stays
on the look out for trading
penny stocks
. This can be done by joining forums
or looking out for new sites that announce penny stock trading.

Need of Analysis and Research before Buying

Before buying stocks, buyers need to research on the company
they want to buy from. They have to find out the market capitalization. This
can be done by multiplying the amount per share by the number of shares in the
market. This should also determine how many penny stocks to buy. The more one
buys, the more research one has to do on the companies.

Once a buyer understands the technique of how to buy shares,
they can make a lot of money simply by trading in the penny stock market.

At other hand one can get lots of tips about share market
buying and selling by visiting to-:


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