Stock Market Pink Sheets
Apr/080
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Being Stock Savvy: Learning the Ropes of Trading Topics Covered:Stock SmartsStock Traders: Consider Your SourcesWhy Do Share Prices Rise and Fall?Stop Loss Orders in Stock TradingThe Implementation of Stock Trading OrdersTrailing Stop Orders in Stock TradingUnderstanding the Concept of Stocks and DividendsTrading StrategiesStock Trading SignalsAll-or-None Orders in Stock TradingBracketed Orders in Stock TradingBuy to Cover Orders with Stock Trad… |
Stock Market Pink Sheets
How To Buy Pink Sheet Stocks – 3 Informative Steps
Before you buy Pink Sheet stocks, you first must know, that Pink Sheet Stocks (Penny Stocks) are not required to meet listing standards like the stocks listed on NASDAQ or the New York Stock Exchange. Pink Sheet stocks are traded over the counter (OTC) via an electronic quotation system. Earlier, these stocks were released in pink slips or sheets. Hence, the odd name, Pink Sheet Stocks. Later, these listings were called penny stocks.
FIRST STEP: Open an account with a brokerage firm.
Investors cannot buy or sell stocks through the OTC Markets. With a brokerage account you can trade Pink Sheet stocks, as well as stocks listed on NASDAQ, and the New York Stock Exchange. There are three types of brokers: a full service broker, a discount broker, and an on-line broker. Full-service brokers can be very expensive; however they can offer advice on which stocks to buy. Discount brokers charge less per transaction but offer less advice. And online brokers offer the cheapest way to trade your stocks. But, the investor does the research (This is the method I have chosen).
Before you choose a firm, make sure they will accept Pink Sheet stocks orders. Not all brokers do! Below is a list of some brokerages that trade Pink Sheets stocks:
Ameritrade
E*Trade Financial
Fidelity
Scottrade
STEP TWO: Learn how to use limit order vs. market order
Simply stated, a limit order is an order to buy or sell a stock at a certain price. When using market orders, you have no control over the price at which your stock will be purchased. Since the market price for your stock could go up or down substantially before your order goes through, a market order may cost you more money for the stock than you wanted to pay. Or, you might sell at a lower price then you wanted.
STEP THREE: Always research your proposed investment.
It’s very important that you make your decisions to buy Pink Sheet stocks based on thorough research of the company’s annual report and financial statements. Be persistent, because good information is hard to find for many of these companies. Be careful when you make a decision to invest in a Pink Sheet stocks, there has been and will continue to be lots of fraud in this area of investing. Do your research!
I personally use a penny stock newsletter to get my stock picks. You might want to look into using one as well. You can click here for more information. They really help in taking the risk out of investing, especially for people who do not have the experience or time needed.
About the Author
I’m a stay-at-home Mom who before kids had a successful career in Corporate America. I have always invested in the stock market, but now it is my only source of income. It allows me to be home with my kids and still earn a great income.
I want to know why a person would buy stock in a Pink Sheets traded co where the CEO owns 154M shares of 200M?
The company that I am interested did a reverse merger with a shell company to become public, and the original shell co. owners got 16M shares and then the company floated another 15M shares, but the owner set up the rest of the stock to be held in another company that he owns 100% of. Why would he do that and how could I convince him to put about 50M shares of his into the public market so I and other investors could buy them? The stock only trades at $.01 and unless he gets more out in the market, I dont think its good for me to buy any right now? Thank you
don’t waste your time or more importantly your money with companies trading below $5 per share, actually set your threshold at $15/share
investing and speculation are two different things
THE STOCK MARKET CRASH 1929 2010
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Being Stock Savvy: Learning the Ropes of Trading Topics Covered:Stock SmartsStock Traders: Consider Your SourcesWhy Do Share Prices Rise and Fall?Stop Loss Orders in Stock TradingThe Implementation of Stock Trading OrdersTrailing Stop Orders in Stock TradingUnderstanding the Concept of Stocks and DividendsTrading StrategiesStock Trading SignalsAll-or-None Orders in Stock TradingBracketed Orders in Stock TradingBuy to Cover Orders with Stock Trad… |
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