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Stock Market Penny Stocks: Low Cost Stocks that Play by the Rules


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What Are Stock Market Penny Stocks?

Stock Market Penny StocksIn many ways, stock market penny stocks are legitimate versions of stocks that many investors see as illegitimate. By definition, a penny stock must cost five dollars per share or less. This is the only thing required for a stock to be known as a penny stock. Most penny stocks have a number of other qualities that make them seem illegitimate to some investors. Many represent new companies and products that have yet to be tested. Many are not properly filed by with the SEC. Many have only a small amount of market capitalization. Each stock exchange has a set of regulations that all stocks must follow if they want to be listed. If a stock does not have enough market capitalization, is improperly filed or has not been around long enough to prove itself, it can only be listed on the over-the-counter (OTC) market. Regular stock market penny stocks can be difficult to find, because most penny stocks do not meet all of the requirements for regular market listing. They do exist, however, and it can be worthwhile to search them out.

 

 The Benefits of Stock Market Penny Stocks

 Although searching out stock market penny stocks may seem like a hassle, it is usually worth the effort. Stocks listed on the regular market carry less risk than those listed on the OTC market. The scam stocks that are so common on the OTC market are rare on the regular market. Only legitimate companies selling real products and services can file with the SEC. Additionally, companies are required to have been around for a certain length of time. This means that you can research their financial and management history and make you decisions based on their past performance. When you invest in stock market penny stocks, you give yourself the power to make informed investment decisions.

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