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In our previous report, we provided an in-depth look at what exactly penny stocks are, and some of the inherest risks involved in trading them. This time we want to give our seal of approval to the MicrocapMillionaires site (see below).

You may recall that a penny stock is a stock that trades for less than five dollars a share and is traded over the counter (OTC) through quotation services such as the OTC Bulletin Board or the Pink Sheets. Although penny stocks are said to be “thinly traded,” share volumes traded daily can be in the hundreds of millions for a sub-penny stock. (In the U.S. financial markets, the term penny stock commonly refers to any stock trading outside one of the major exchanges (NYSE, NASDAQ, or AMEX)).

One of penny stock’s exciting features to many investors is the low price and perceived potential for rapid growth, although it pays to be aware that sudden changes in demand or supply of penny stock can lead to volatility in the stock price up or down. One way to get information on penny stocks is thru the use of the Pink Sheets.

(Important note: Before a broker-dealer can sell a penny stock, SEC rules require the firm to first approve the customer for the transaction and receive from the customer a written agreement to the transaction. The firm must furnish the customer a document describing the risks of investing in penny stocks. The firm must tell the customer the current market quotation, if any, for the penny stock and the compensation the firm and its broker will receive for the trade. Finally, the firm must send monthly account statements showing the market value of each penny stock held in the customer’s account.)

The MicrocapMillionaires site is a membership site that provides its members with insider picks and stock alerts.

As with any stock market trade, we advise caution and suggest never playing with money that you can’t afford to lose!

Click here for more information: MicrocapMillionaires

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