Posted on 09 September 2012. Tags: where to find penny stocks
Knowing where to find penny stocks is more than just a matter of locating the right kind of broker. Once you have determined where these low-priced stocks are available, you also need help identifying which stocks are your best options. There are many online publications which provide timely tips about which penny stock are worthy of notice.
You cannot find most penny stocks on the major stock exchanges. The companies behind these stocks have generally not filed with the SEC. Therefore, they are not traded in exchanges, which guarantee a certain amount of oversight during transactions to prevent fraud. If you want to know where to find penny stocks, you will have to look in the over-the-counter (OTC) market.
The OTC market is not a particular place, like Wall Street. Instead, this term refers to the independent nature of the transactions. You buy these stocks directly from the seller, without any institutional oversight. The risk for fraud is elevated with penny stocks due to the lack of oversight.
You can use a penny stock broker to make your purchases. Good brokers will facilitate your search for available penny stocks. You should review the policies of each broker in regard to commissions before making a commitment and opening an account. These charges can eat into your profits if you are not careful.
Once you have a broker and access to the OTC market, the only question remaining will involve your selection. It is necessary to get some help from a published penny stock list in order to reduce the number of stocks that you have to consider. A key part of knowing where to find penny stocks is limiting the number of candidates intelligently.
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