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May 17, 2022, 9:35 a.m. EDT

What Is A Penny Stock - Definition & More

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How To Buy Penny Stocks

When buying penny stocks, most traders and investors will determine how much money they're willing to part with. Said another way, how much could you lose without it impacting your daily life? Since there is still risk involved, it isn't uncommon for penny stocks to lose 50% or more of their value in a very short period. If you're new to trading, you may not have the proper skills to know that taking a 10% loss now will save you from a 40% loss later on because you held onto a position you "hoped" would rebound.

You'll also want to understand the trading fees involved. Since many new traders will begin with smaller accounts, they'll likely make smaller monetary gains. If your winning trade nets you $20 but your fees are $14 for placing a buy and sell, you're left with $6, and remember, you've also got to pay taxes on that money. Thanks to companies like Robinhood Markets ( NASDAQ: HOOD ), Webull, and others, there is plenty of low commission and no commission options when it comes to brokerage services.

What Is Stagflation & Why Does It Matter For Penny Stocks? [Answered]

You'll also want to understand any limitations of your broker. Robinhood, for example, restricts access to OTC penny stocks . Even though you can buy cryptocurrencies like Shiba Inu for fractions of a penny, their stance on penny stocks trading under $0.01 is strict. In this example, if you want to buy OTC penny stocks, platforms like Robinhood may not be your best option.

Final Thoughts On Penny Stocks

If you are interested in learning more about penny stocks and the stock market as a whole, then you need to check out True Trading Group, the fastest growing & highest-rated online premium educational platform available today!

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  1. Take out your cell phone

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Complete the three easy and free steps above, and you are good to go!

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COMTEX_407332453/2643/2022-05-17T09:34:33

Is there a problem with this press release? Contact the source provider Comtex at editorial@comtex.com. You can also contact MarketWatch Customer Service via our Customer Center.

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