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    Understanding Penny Stock Investment for Teens and Young Adults
    Understanding Penny Stock Investment for Teens and Young Adults
    Understanding Penny Stock Investment for Teens and Young Adults
    Ebook258 pages6 hours

    Understanding Penny Stock Investment for Teens and Young Adults

    By Ronald E. Hudkins

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    About this ebook

    Reading this book can help you discover how to effectively take a small amount of capital to create a lifetime of wealth. The information in this book can help you in your quest to make money in the penny stock market. The secret really to the successful investing in penny stocks is just like poker and simply put, that is knowing what cards to play and when to play them.

    Penny stocks are a different kind of investment than most traditional stocks traded on an exchange and it is critical to understand what moves penny stocks before you begin investing. The fact there is a small price point makes penny stocks a perfect place to start bidding for beginner investors and done right, you can capitalize on their systematic growth quickly!

    Understanding Penny Stock Investment for Teens and Young Adults explains the basics of penny stocks and provides expert guidance to help you get involved right away. Even though penny stock trading provides the potential of what many call life changing returns on an investment, this high profit potential comes at a price. That price is nothing less than volatility, and to protect yourself, you must be knowledgeable and ready to implement information about how to manage your money, research your trades and exit a trade correctly to succeed.

    Though this book builds you a great foundation my best suggestion is to read everything you can on the subject of penny stock investing before diving into a trade. Simply put, know what you are getting into before you click that future buy button.

    LanguageEnglish
    PublisherRonald E. Hudkins
    Release dateAug 27, 2014
    ISBN9781311839220
    Understanding Penny Stock Investment for Teens and Young Adults
    Author

    Ronald E. Hudkins

    Ronald E. Hudkins (1951-Present) was born in Canton, Ohio and grew up in Massillon, Ohio. He was drafted into military service in 1970 where he remained up until 1993 when he retired honorably from the U.S. Army, Military Police Corps. During his service and after, he attended many universities that include Kent State University, Maryland University, Central Texas College (European Branch), Blair Junior College, Hagerstown Junior College and Phoenix University. He mostly completed general studies but declared two majors in the areas of Business Administration and a Bachelor of Science in Information Technology. Although he was an intelligent student he was never on the Dean's List, or voted a most likely to succeed candidate. He did not graduate with any specific degree however if you were to consider all his credits and self-study he could reasonably be considered a Rogue Scholar.

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      Book preview

      Understanding Penny Stock Investment for Teens and Young Adults - Ronald E. Hudkins

      Copyright © Ronald E. Hudkins 2014

      All Rights Reserved

      Print ISBN-13: 978-1500916282 CreateSpace Assigned

      Print ISBN-10: 1500916285

      In accordance with the U.S. Copyright Act of 1976, the scanning, uploading and electronic sharing of any part of this book without the permission of the publisher constitute unlawful piracy and theft of the author’s intellectual property. If you would like to use material from the book (other than review purposes) prior written permission must be obtained by contacting the publisher in writing @ Ronald E. Hudkins, 169 Countrymens Way, Durango, CO 81303-7882.

      Smashwords Edition, License Notes

      This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

      Thank you for your support of the author’s rights.

      BOOK DESCRIPTION

      Understanding Penny Stock Investment, Book 3 for Teens and Young Adults.

      Reading this book can help you discover how to effectively take a small amount of capital to create a lifetime of wealth. The information in this book can help you in your quest to make money in the penny stock market. The secret really to the successful investing in penny stocks is just like poker and simply put, that is knowing what cards to play and when to play them.

      Penny stocks are a different kind of investment than most traditional stocks traded on an exchange and it is critical to understand what moves penny stocks before you begin investing. The fact there is a small price point makes penny stocks a perfect place to start bidding for beginner investors and done right, you can capitalize on their systematic growth quickly!

      Understanding Penny Stock Investment for Teens and Young Adults explains the basics of penny stocks and provides expert guidance to help you get involved right away. Even though penny stock trading provides the potential of what many call life changing returns on an investment, this high profit potential comes at a price. That price is nothing less than volatility, and to protect yourself, you must be knowledgeable and ready to implement information about how to manage your money, research your trades and exit a trade correctly to succeed.

      Though this book builds you a great foundation my best suggestion is to read everything you can on the subject of penny stock investing before diving into a trade. Simply put, know what you are getting into before you click that future buy button.

      Financial Disclaimer

      The material provided in this publication is for information purposes only, and does not constitute advice or recommendations. The information provided in this book is designed to provide helpful information on the subjects discussed based upon my relative experience with stocks. Any products referenced or linked in the material are not endorsed by the author and people who choose to pursue particular products or services cannot hold the author liable for any losses or other problems experienced. References are provided for informational purposes only and do not constitute endorsement of any websites or other sources. Readers should be aware that the websites, resources and information listed in this book may change.

      Table of Contents

      Copyright

      Book Description

      Financial Disclaimer

      CHAPTER 1 What Are Penny Stocks?

      a) Are Penny Stocks a good way of Investing?

      b) Why Should I Invest in Penny Stocks?

      c) How Do I Get Started in Penny Stocks?

      d) What Do You Need to Get Started in Penny Stocks?

      e) Where Can I buy Penny Stocks?

      f) How Much Money Do I Need to Start Trading Penny Stocks?

      g) What Happens When I Place an Order to Buy or Sell a Penny Stock?

      CHAPTER 2 Where Do Penny Stocks Trade?

      a) How Often Can I Trade Penny Stocks?

      b) How Do I Find Quality Penny Stocks to Invest In?

      c) What Should I Do if I Want to Make a Penny Stock Investment?

      d) Are Penny Stocks Investments Risky?

      e) Can I Make a Living Trading Penny Stocks?

      CHAPTER 3 Is My Money Safe in Penny Stocks?

      a) Are Penny Stocks a good way of Investing?

      b) If I Invest in Penny Stocks, Where Can I track them?

      c) How is Penny Stocks Different from Other Stocks?

      d) How Do I Get Information About Penny Stock Companies?

      e) Who Can Sell Penny Stocks to Me?

      CHAPTER 4 What Type of Broker Should I Use?

      a) What Questions Should I Ask the Broker?

      b) What Options Does My Broker Have for Executing My Trade?

      c) What Questions Should I Ask About the Progress of My Penny Stock Investments?

      d) What is the Brokers Mark Up or Mark Down?

      e) Who Are Market Makers?

      f) What Are Market Makers?

      CHAPTER 5 What is Regulation S?

      a) What is EDGAR?

      b) What is the Spread?

      c) What is Going Long vs. Going Short?

      d) What is a Bid Price?

      e) What is a Short Term Stocks Trade?

      f) What is a Micro-Cap Stock?

      CHAPTER 6 What is Day Trading?

      a) Why Day Trade Penny Stocks?

      b) How Do You Make Money in Day Trading?

      c) Isn’t Day Trading Risky

      d) Why Not Day Trade Blue Chip Stocks?

      CHAPTER 7 How Should I Trade My Penny Stocks?

      a) What is Payment for Order Flow?

      b) What is a Limit Order?

      c) What is a Market Order?

      d) What is the Ask Price?

      CHAPTER 8 Where Can I Find Quoted Prices for Stock I Am Trading in the OTC Market?

      a) Where Can I check How My Penny Stocks Are Trading?

      b) How Do I Know the Penny Stock That I Am Considering Investing in is Not Fraudulent?

      c) Should I Worry When Buying Shares of Penny Stocks That Has Declared Bankruptcy?

      d) Why Do Penny Stocks Change So Much?

      e) Can I Make Money with a Buy and Hold Strategy?

      f) How Do I Find Out More About the People Running the Penny Stock Company?

      CHAPTER 9 What Are the Penny Stock Investment Fraud RED FLAGS to Look Out For?

      a) What Are Some of the Penny Stock Scams?

      b) Boiler Room

      c) What Type of Investments Do Boiler Room Operators Peddle?

      d) Internet Fraud – Pump and Dump

      e) Where Can I Turn To For Help If I Become the Subject of a Penny Stock Fraud?

      f) How Do I Protect Myself from Internet Fraud?

      g) What Do I Do If I Suspect that something is Amiss After I have made a Penny Stock Investment?

      h) How to Initiate a Loss Recovery

      Book Review Request

      About the Author

      Author’s Other Books

      Internet Presence Ronald Hudkins

      Chapter One

      What Are Penny Stocks?

      Nowadays, there are different kinds of investment that you can consider. Trading in major stocks has become quite common. However, to invest, you need a substantial amount of investment to trade in major market exchanges. Penny stocks are an alternative for those who are interested to invest. Just as the name suggests, penny stocks are usually small sized stocks that have a lower price tag and market capitalization and always trade on the sidelines of major stocks. Penny stocks are also known as nano, micro or small cap stocks.

      It is important to note that despite their name penny, you won’t find one for such an incredibly low amount. Traditionally, they are considered have a value of less than $ 5 and sometimes feature on large trading platforms such as NYSE, NASDAQ and AMEX. One characteristic of penny stocks is that their lack of liquidity makes them a high risk investment. If you didn’t know, penny stocks traditionally trade over the counter. Companies involved with penny stocks are subjected to reduced listing requirements enjoying more lenient regulatory standards.

      It’s important to point out that penny stocks don’t have a standard accepted definition as some refer to them as stocks that trade for pennies or under $5. In some quarters, stocks that trade off major markets are considered to be penny stocks. There has been confusion in some instances particularly with large corporate entities measured in terms of market capitalization having shares going below the value of $5 per share. On the other hand, we have small corporate organizations that trade $5 or more.

      Many investors love penny stocks because they are an untamed and often attract less media publicity and glamour which is usually associated with the major stocks. Most of the times, the inside happening in penny stocks never manage to get to the media. However, this does not mean that they don’t attract any drama. We don’t get to hear much about penny stocks on major business platforms such as CNBC or The Wall Street Journal. If you didn’t know, pump and dump has affected several the operations of penny stocks. This basically refers to a scenario where penny stocks make payments to third party affiliates to with the aim of attracting not so well performing companies to sell shares to unsuspecting investors. This habit has paved way for several scams to take place since a lot of dealings are done in a corrupt manner. When investing in penny stocks, you should know that some of them involve underhand dealings, investing in solid and reputable companies is the best way to stay informed and be assured of trade transparency.

      Penny stocks don’t involve a heavy investment such as other key stocks running on major exchanges. If you are interested in pennies, you should contact your regular stockbroker to facilitate purchase. When you find a good stockbroker, you are assured of enjoying affordable commissions and great execution to trading. One thing you should note is that cheap stocks listed on platforms such as NYSE and NASDAQ are not necessarily penny stocks. Actually, you can obtain some good benefits with low risks. Major exchanges have demanding listing requirements. Despite the fact that the advantages might not be as real as true penny stocks, they are known to be reliable. Penny stocks most commonly trade on services such Over-the-Counter Bulletin Board (OTCBB) which is a quotation as compared to Pink Sheets which is a quotation publisher. The listing requirements are retained by OTCBB increasing the levels of legitimacy.

      Using Pink sheets, investors access quotation information for stocks which are registered with it. Unlike OTCBB, Pink Sheets are not SEC registered and therefore have no mandate of enforcing listing requirements. This makes them more vulnerable to scams from market traders and insiders with penny stocks included.

      Penny stocks are still a favorite for many investors because of volatility and attainment of fast results. If you are willing to take the risk and invest in a scheme that is likely to give you quick returns, the volatile nature of penny stocks which causes violent fluctuations can bring luck your side. Some people have benefitted a lot from penny stocks with stocks that jump from as low as $0.08 to $8 in a fortnight. Penny stocks that issue a Press Release realize incredible results. When you research on the internet, you will find success stories on investing boards such as Investor Hub detailing how some investors are smiling all the way to the bank thanks to Penny stocks.

      It is not often easy to find companies that will transform penny stocks to a major exchange. However, if you get lucky to find one, the paid outs are impressive. Millionaires and early retirements benefit from this arrangement which I must say is very rare and golden opportunity. Just like any other stock investment, numbers undergo fluctuations to gains of over 1000% in just a matter of days or weeks. Penny stocks have propelled some investors to become millionaires in very short periods of time. The real trick is getting the most appropriate stock. Despite the several risks and drawbacks associated with penny stocks, investors still consider them as an ideal method to try out in case the windfall is worth it.

      Brave investors still find penny stocks a wise choice to try out because of the potential ability to generate impressive returns. Stock market investors understand very well the risks involved with stock trading, penny stocks included. Penny stocks can benefit you a lot if you learn how to avoid scams or bad penny stock and choose to with professional stock trade companies. It is good for find a guru that can show you how to effectively earn from penny stocks. Just like investing in any other stock, it is important to find someone who will help you understand what penny stocks are and how you can use them to live the life you have always wanted. Nice vacations, huge assets and financial independency await those who make a wise investment.

      Chapter One (Section a)

      Are Penny Stocks a good way of Investing?

      These days, many of us are looking for smart ways of investing with a potential to generate good financial results. The stock market has on many occasions been fronted as one of the best channels to build your financial empire particularly if wise investment choices are made. In case you are wondering if you should invest in stocks, you need to be open minded and consider all options available. Investing in stocks solely depends on how much money you have at your disposal. While some of us may have massive funds to part with, others may prefer to go for the smaller penny stocks instead.

      In recent times, penny stocks have become very common especially for people who are looking for investment channels. You probably might have heard conflicting information regarding investing in penny stocks. While some have managed to reap huge returns from an otherwise small investment, other investors have totally flopped in their quest to make an impact with penny stocks. A major question many people are asking nowadays is if it is wise and safe to invest in penny stocks.

      Any smart investor needs to carefully consider all the pros and cons of an investment before making any crucial decisions. To know whether penny stocks are a wise investment or not, you must understand what they are, how they operate and how you can successfully earn from them. Many people become disappointed with stock investment particularly due to lack of having adequate knowledge before making any major investment decisions. One key advantage of penny stocks is that they involve smaller investment amounts thereby substantially reducing the chances of risks occurring.

      On most occasions, investors prefer to trade with penny stocks as a way to test the waters of the stock market investment. The love affair with penny stocks is due to the fact that you can purchase hundreds of shares for a few hundred or thousand dollars. For many investors, this makes them feel like big fish. For those who choose to buy many penny stocks, a small upward change in the price could increase the chances of a fortune. Despite the hurdles one has to go through, penny stocks provide someone the ability to generate huge returns in cases where low priced stocks make tremendous gains.

      One common misconception many people have is that penny stocks are traded backdoor. This is not true as recent developments have seen a couple of blue chip firms gaining interest in penny stocks. When investing in penny stocks, you should know that penny stocks also have their disadvantages. These stocks don’t enjoy institutional support and therefore you should bear this in mind when purchasing them. What this means is that penny stocks don’t get to appear on the screens as mainstream stocks. For stock prices to increase, it is important for institutions to provide support in order to increase stock prices.

      People wishing to invest in penny stocks usually find it challenging to get accurate company information. Remember, the company that is sponsoring the penny stocks needs to have adequate information. In other words, while on the internet, you need have the opportunity to quickly find meaningful company information. Misconceptions have rocked the penny stocks industry and knowing whether it’s wise to invest in them or not is based on the amount of information and facts you can gain access to.

      One thing you should know is that penny stocks otherwise known as microcap stocks are listed on OTCBB exchange or Pink Sheets. One important fact to keep in mind is that OTCBB requirements are not as strict as NASDAQ or NYSE. Pink Sheets present more risks for investors since there is less oversight therefore opening avenues for fraud. The reduced levels of reporting expose these stocks to the risk of fraudulent occurrences.

      Penny stocks have worked well for quite a number of people, if you are keen on reaping good benefits from stocks, you can consider higher quality stocks for investment. Penny stock investments have enabled many people to earn quite well from this venture. If you are keen on this venture, you should ensure that you know in advance how much you want to invest in penny stocks. If you just want to test out the market and still have some doubts, it’s better off to start small. It is of course important to consider this venture as a gamble just to avoid any future disappointments that might arise in case things do not go as planned. Penny stocks are a good investment idea so long as you have adequate supporting information and facts on how to invest.

      Chapter One (Section b)

      Why Should I Invest in Penny Stocks?

      It is important to know that betting on the right penny stocks is a great way to watch your investment double or triple. When you decide to buy penny stocks, you need to look for good stock investors so as to make profit. This is the reason why you need to look for penny stocks that will make bring you profits. If you are new to penny stocks world, you need to know that penny stock are usually less than dollar per share. To explain further, penny stocks do not meet the requirements being listed in major stock exchange such as NYSE or NASDAQ.

      If you want to buy penny stock, it is a great idea to use a discount stock broker who has enough experience how to buy penny stocks. Since penny stocks are not traded on a standard exchange, you need to sign a special agreement or make a phone call. You also need to be careful of free penny stocks trading advertisements. This is because there are a lot of scams happening. Investing in penny stock requires one to pay a discount broker commission.

      Where can you find good penny stocks to invest in? This can be a challenging question for many to answer especially if you are looking for safe investments. Due to their nature, penny stocks can be easily manipulated in the market. This is why you need to understand all about penny stocks before investing in them. To find any good stock,

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