People want to invest in Penny Stocks because they are cheap. Not So. Penny stocks are not as regulated by the SEC as most other stocks are, and so they can be Manipulated by unsavory folks. SO the owners of a 50 cent stock can 'spread a rumor' that a big deal is coming, wait for the stock to increase to $2, sell Their shares and say nothing more about it-then the stock dives-is it legal? No, but the regulatory agency isn't there to stop it.
Using "penny stocks" and "legit" in the same sentence is a oxymoron expression.
Registered broker/dealers are prohibited from recommending penny stocks to any of their customers or to the general public, therefore no reputable broker will "advertise" penny stocks on their websites.
From a brokerage firm’s perspective having their customer deal in penny stocks is a loosing proposition. Many firms do what ever they can to discourage such investments/trading, especially from new accounts. No firm wants to be known as a “penny stock” firm, this would not be a honor but an absolute disgrace.
Firms are more than willing to permit existing customers trade occasionally in penny stocks but very few firms want customers to trade in them frequently. Usually experienced customers will occasionally trade in a penny stock but they know what they doing. But new customers who want to trade in only penny stocks present problems for brokerage firms. Not only are the transactions problems but the customers lack of knowledge is very difficult to deal with.
If you were to buy penny stocks, you pay for them like any other stock transactions. Sime firms require new account to have the money in their account before they execute a buy order for you, others expect the money deposited on or before the settlement day of the transaction.
Penny stocks "work" like any other stock except penny stocks DO NOT trade in a regulated market, therefoe you buy them at your own risk.
Penny stocks ARE NOT for newbies. Only those with trading experience should consider trading in pennies since they understand the market, the risk and the problems associated with penny stocks.
Those with securities experience will tell you that you are foolish to start in the market by using penny stocks and those that are in business will tell you not to do it.
So with experienced investors/traders telling you not to do it, and those that are professional tell you not to do it, and even the Securities & Exchange will not recommend you do it, why do you think you can make any money.
Just like normal stocks if the broker can find them to buy.
Well 99.99 % of the time, you buy them, then they sit for years slowly declining to even nearer to zero, then you sell them for a pittance and get a tax loss.
penny stocks are worse than gambling. They can easily be manipulated and cost you all your money. However, to play in that game you have to get a brokerage account so you can trade. Deposit you money there and have at it
penny stock as a same intraday trading
You are more likely to see Bigfoot standing in your yard playing a violin.
like what? 🙂