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penny stock trading advice

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Veteran
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Joined: Nov, 2008
Posts: 3859
Posted: #1
I am trying to learn how to invest in penny stocks, I know they are risky as they can crash and be caught up in pump and dump schemes so I know most people will say "stay away" but I recently have been watching a couple different penny stocks and just been using the investopedia trading simulator and writing other down in a notebook. A couple have done well for and shows I could have profited a nice chunk of change. the penny stocks would be 1-10 days of holding, not long term trading. short term only. 

example

stock A: 

stock price # of shares         purchase price

.07 cents    50,000           3,500

the stock had risen to .40 cents over 8 days, which after selling at that price is 20k even, so a 16,500 profit, then am I right here where I pay the government my capital gains (15%) (2,475.00), so I walk away with 14,025 profit.

math basically from here

https://www.investopedia.com/articles/00/102300.asp


I have been doing a little reading on penny stocks and confused on some things. I will have to go back and find the articles I read but they had wrote that with penny stocks, sometimes you wont be able to sell the stock and if you are able to, it may be at a lower price then you think? If I am on an online brokeage (ameritrade, scottrade, etc) if the site says .40 and I sell. shouldn't I get that immediately? 

opinions, ideas, thoughts all welcome.



 
Covers Rehab
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Joined: Jan, 2005
Posts: 8856
Posted: #2

Did you already say "stay away".  I think you already know the advise, but careen down this path regardless.


Let me put this simply.. This is a gambling site.  Keep your gambling to sports, and keep your "investments" to more concrete companies that won't lose all your money.

 
Captain
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Joined: Jun, 2003
Posts: 8346
Posted: #3
Seriously, if you have money to invest why invest in junk companies? Makes no sense. In the long term you can guarantee gains in many quality companies. With penny stocks there is zero guarantee. Now if you have limited funds why don't you just take your shekels and just bet on a game. Your results will be so much quicker. 
 
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Joined: Nov, 2008
Posts: 3859
Posted: #4
lol yeah I completely understand. I have retirement accounts, invested in good long term stocks as well.. and I gamble on a budget, nothing crazy. but I would like to try this, however I don't want to buy a stock if I am unable to sell it. I would like to know any truth to this. more info would be great. thanks 

 
Veteran
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Joined: Mar, 2004
Posts: 1330
Posted: #5
If you're looking at this as a gamble.... why don't you just play options on the big names...NFLX, GOOGL, FB, SPY, TSLA, AMZN, AAPL, TWTR, et al.  

You can easily get those huge home runs that you want on a daily basis...FYI...NFLX weekly options last week on certain strikes.was up 4,000%   CMG(Chipotle) had a stupid Friday where the 675 calls were up over 43,000%.   Yes you have to get lucky but the bottom line, why try to hit a homer on a penny stock and worry about liquidity when you can trade the big names and get in and out within minutes and 95% within  seconds!

With penny's you always have to hope for a buyout, huge Press Release and constantly worry about a a P&D.  Just sayin' there are other routes to gamble in the market.
 
All-Star
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Joined: Oct, 2008
Posts: 11316
Posted: #6
better chance of hitting 7-10 team parlays
 
Legend
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Joined: Feb, 2005
Posts: 41555
Posted: #7
Quote Originally Posted by schust06:

I am trying to learn how to invest in penny stocks, I know they are risky as they can crash and be caught up in pump and dump schemes so I know most people will say "stay away" but I recently have been watching a couple different penny stocks and just been using the investopedia trading simulator and writing other down in a notebook. A couple have done well for and shows I could have profited a nice chunk of change. the penny stocks would be 1-10 days of holding, not long term trading. short term only. 

example

stock A: 

stock price # of shares         purchase price

.07 cents    50,000           3,500

the stock had risen to .40 cents over 8 days, which after selling at that price is 20k even, so a 16,500 profit, then am I right here where I pay the government my capital gains (15%) (2,475.00), so I walk away with 14,025 profit.

math basically from here

https://www.investopedia.com/articles/00/102300.asp


I have been doing a little reading on penny stocks and confused on some things. I will have to go back and find the articles I read but they had wrote that with penny stocks, sometimes you wont be able to sell the stock and if you are able to, it may be at a lower price then you think? If I am on an online brokeage (ameritrade, scottrade, etc) if the site says .40 and I sell. shouldn't I get that immediately? 

opinions, ideas, thoughts all welcome.



SOUNDS EASY BUT YOU NEED VOLUME THE DAY YOU SELL YOUR STOCK! I LEARNED THE HARD WAY ON PENNY STOCKS!

IT'S A SUPPLY AND DEMAND CONCEPT! WHEN YOU SUBMIT YOUR SELL TICKET, THERE NEED TO BE A BUY TICKET ON THE OTHER END TO COMPLETE THE TRANSACTION AND IT MIGHT NOT BE THE PRICE YOU'RE ASKING FOR

IF THE PRICE OF THE STOCK IS 60 CENTS BUT THERE IS NO VOLUME THAT DAY YOU CANNOT SELL AND OF COURSE MIGHT NOT BE AT THAT PRICE ALSO! VERY TRICKY!! ONLY ON PAPER YOUR STOCK IS WORTH THAT MUCH! JUST LIKE ANYTHING ELSE YOUR STOCK OR WHATEVER YOU'RE SELLING IS WORTH AS MUCH AS THE BUYER IS WILLING TO PAY FOR IT!!!!!!!

 
 
Banned
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Joined: Jun, 2015
Posts: 19
Posted: #8
Penny Stocks are good for manipulating the prices and winning money from fools. Investing in Penny Stocks without you being a principal silent partner gaining on inside information is an act of sheer idiocy
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