Best E*TRADE Penny Stocks

The post Best E*TRADE Penny Stocks by Dan Schmidt appeared first on Benzinga. Visit Benzinga to get more great content like this.

Penny stocks can be attractive trading options due to their endless volatility. Penny stock traders whose time moves perfectly can wind up doubling or tripling their money in a matter of minutes. But these stocks are not investments. Penny stocks are cheap for a reason, and most companies with cheap stock prices are in some kind of trouble. It’s important to know about the best E*Trade Penny Stocks.

Penny stocks are for traders, not investors. Most investors consider penny stock trading to be nothing more than gambling. Information about these companies is often difficult to find or even opaque—as opposed to the transparency you find with bigger and more successful. The companies can be plagued by debt woes, cash flow constraints, lawsuits or simply bad management. 

If you’re ready to gamble with the rampant volatility and sudden moves of penny stocks, take a look at E*TRADE as 1 of the best brokers to consider. 

Quick Look at the Best E*Trade Penny Stocks:

• Amyris, Inc.
• McEwen Mining Inc
• Uni-Pixel
• Integrated Media Technology
• Genetic Technologies Ltd

Overview: E*TRADE Penny Stocks

Penny stocks can be defined in several ways. To some investors, penny stocks are the ‘pink sheets’ or microcap stocks that trade over the counter away from the major exchanges. These stocks not only trade for pennies but sometimes for fractions of a penny. 

Some traders with large followings also buy up shares and promote the stock to followers. The followers then jump into the stock, bid the price up quickly, and allow the initial trader to dump shares for massive gains. Once the euphoria fades, the stock quickly crashes back down and the followers are left holding the bag.

Penny stocks can also refer to downtrodden stocks that trade for less than $5, but are still listed on major exchanges. The definition of a penny stock tends to shift based on what you’re looking at or the trader you’re speaking with. Since more information is publicly available about these types of penny stocks, these are the stocks we will review. These stocks aren’t as risky as the fraud-riddled pink sheets, but they will have problems of some kind.

E*TRADE is 1 of the few major brokers to open its doors to penny stock trading, and clients can access a number of different shares from their accounts. Stocks listed on major exchanges with share prices over $1 trade commission-free on E*TRADE, but pink sheets and over-the-counter stocks will cost $6.95 per trade. You can use E*TRADE screeners to filter for stocks under $20, stocks under $10 or stocks under $5 — penny stocks.

Features to Look for in E*TRADE Penny Stocks

1. Low float. The float refers to the amount shares available for purchase on the open market. The higher the float, the more abundant shares are for investors to purchase. Low-float stocks are often the most volatile since it doesn’t take much volume to create massive volatility when very few shares are available. Penny stock traders look for volatility and low-float stocks can gyrate wildly.

2. Exchange listing. Stocks listed on the NYSE or NASDAQ exchanges are subject to rules and regulations that pink sheet stocks are not. When looking for penny stocks to buy, check to make sure the company is listed (or at least has a share price close to $1). When a stock dips below $1, it becomes in danger of being delisted.

3. Profit or product. Remember, these companies trade down here for a reason. A successful penny stock doesn’t need to have a history of positive earnings per share (EPS) or earnings beats, but it does need a catalyst or path to success. 

Take a Look at E*TRADE Penny Stocks

Penny stocks are often low-float securities issued by companies with severe underlying issues. But penny stocks aren’t meant for long-term investment. Penny stocks are speculative vehicles for trading strategies like swing trading, scalping or momentum.

If you can stomach the volatility, you might be able to squeeze massive returns from penny stocks. Just be sure to know the risks before sinking any money into your E*TRADE account.

Frequently Asked Questions

The post Best E*TRADE Penny Stocks by Dan Schmidt appeared first on Benzinga. Visit Benzinga to get more great content like this.