blondie0420

A penny stock is basically one that sells for less than $1.00 per share, but sometimes people consider stocks less than or equal to up to $5.00 per share penny stocks too. (I'm talking in dollars here, but for the boards it'd be in grams obviously.)

They're highly speculative. Since they trade at such cheap prices, people usually buy a lot at a time, which means your money can leave you pretty quickly. But at the same time, you're not really spending a ton on them, and the earnings potential can be astronomical. For instance, Oplink Communications at one point traded for about $1.64 per share, then soared to $17.95 per share. That represents a 1089% gain. Pretty freaking good, huh? (If you had purchased 1,000 shares at $1.64 each and sold them for $17.95 each, your return would be about $16,310.)

One thing you do have to be careful of is buying a penny stock that's not getting a lot of action. You don't make money if no one is making any bids on your company's shares, you know? I looked up a couple of penny stocks and noticed that hadn't been traded since the beginning of August! Sure you're not going to lose money if your stock isn't moving, but you're also not going to make any either.


What do you guys think of penny stocks? Good idea/bad idea?


I just purchased 1,000 shares each of two different stocks trading for .43 a share. I'm thinking that even if they bomb, I still only invested 430 grams for 1,000 shares of each. A whole 860 grams total doesn't seem like a big deal to me, so I'm just trying them as a little experiment for the time being. I didn't really have much luck in the other stocks I bought (which traded for around 20-30 grams per share). I lost a lot of grams really fast with those, so I'm thinking this could turn out to be an ok thing. Only time will tell, I guess.

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