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Penny Stocks

Penny Stocks - The Risks.

This and similar names are applied to the cheapest stocks of all, while some do not have high volatility others may have extreme fluctuations in price, they can rise by hundreds of percent in a short time, then fall even faster. They can sometimes be driven by rumour and other unreliable information but others can be good quality stocks on the way up and are a good investment opportunity, you must always exercise due diligence and extreme caution with these stocks .

Sometimes their high volatility and price increases can reflect positive news and a sustainable price, you need to do diligent research to ascertain reasons for price move, consult your Stock Broker for the information.

A stock which has risen from 0.01 to 0.02 has a 100% increase in value. A very attractive deal but be very careful as the potential for risk may be greatly increased.

There may have only been a small number of buyers and when they stop buying, there are no more buyers to sustain the price and it falls rapidly. While good profits can be made from these stocks, extreme caution is advised as well as diligent research into the stock's fundamentals with your Stock Broker.

Because these stocks will show up in the selections from time to time it is essential to consult your Stock Broker before trading in these or any stock listed on this site.

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