Penny stocks, due to their tiny share prices, allow online investors to buy large numbers of shares.

Owning large chunks of stock is appealing, but penny stocks can also be easily manipulated. Many penny stocks also trade on the generally unregulated Pink Sheets and OTC Bulletin Board markets, considered to be the Wild Wild West of online investing. Read the warnings from regulators: The Securities and Exchange Commission SEC has released multiple warnings to investors about investing in penny stocks.

64 Penny Stock Trading Rules To Honor My $, Profit Week, I'm Mad You Probly Don't Know Them, Do You? - Timothy Sykes

The highest-quality rating is otcQX, followed by Pink Quote OTCBB, OTCBB Only, Pink Sheet Current Information, Limited Information, No Information, Grey Market, and then Caveat Emptor. The OTC Bulletin Board offers similar information on its stocks. Do your due diligence: You should, at the very least, see whether the company has released any financial statements.

And if financial information is available, you should carefully analyze it. StockPatrol also features in-depth investigative reports of companies, including many penny stocks.

Just reading the stories, meanwhile, can give you an idea on how to investigate penny stock companies. Toggle navigation Search Submit. Learn Art Center Crafts Education Languages Photography Test Prep.

Investing Online For Dummies Cheat Sheet. Ten Ways to Protect Your Investments and Identity Online.

How Capital Gains Are Taxed. How to Trade in Penny Stocks. Related Book Investing Online For Dummies, 8th Edition.