First off, you can only lose as much as you have invested right?, Second, what prevents people from investing large sums of money into penny stocks that are worth a fraction of a cent? And then pulling their money out when the stock goes up another fraction of a cent? Even though its a fraction, its still a large gain.
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Beginner Stock Market question?

Trader 5:02 pm on December 19, 2009 Permalink
Hey!! It’s so funny… I just asked the exact same question 5 seconds after you!! I am wondering the same thing. I am watching this one stock switching from 0.001 to 0.0011 20 times a day and i’m wondering why people don’t buy it at 0.001 to sell it 20 minutes later with a 10% increase.. Check out the stock is HTDS… and by the way this is not spam.. I’m seriously wondering why not to buy the stock. :$
John
jeff410 5:02 pm on December 19, 2009 Permalink
It works for some people. Others keep thinking it will still go up and dont pull their money out. And many times the penny stocks go down instead of up.
RAMESH CHANDRA J 5:02 pm on December 19, 2009 Permalink
if you are fearing then keep away from stock market and first you practice then jump to the market without any fear only then you may be succeed
EJ 5:02 pm on December 19, 2009 Permalink
1. Right
2. The fact that penny stocks are semi-limited. You can only own so much of a company. And that penny stocks are dangerous waters. A fraction of a cent up could lead to large gains but a drop is far more likely, and you’d lose just as much.
Chand 5:02 pm on December 19, 2009 Permalink
If you are beginner in the stock market, I would advise you to stay away from penny stocks. As one of the answerer has said, the probability of going down by fraction of a penny is the same as going up. Also keep in mind that there are many seasoned speculators on the other side of the trade!
PLUS . MINUS 5:02 pm on December 19, 2009 Permalink
You can do the same for the non-penny stocks as well. But is it easy (with either penny or non-penny stocks) ? Nope. It is the same.
Stock Intraday Signals 8:51 pm on December 19, 2009 Permalink
Where can I find rankings for stock advisers and pickers?