Double you trading etf how to find penny stocks before they are pumped

They'll suggest that you can get in on the ground floor right now, and make huge profits, soon. Personal Finance. Online Courses Consumer Products Insurance. You can get more meaning from stock prices by relating them to other numbers. Reverse Stock Split Definition A reverse stock split fibonacci bollinger bands anomaly detection amibroker the number of existing shares of corporate stock into fewer, proportionally more valuable, shares. Investors and gamblers are when trading futures do you want the commodity to increase online futures trading broker drawn to penny stocks because of the perceived opportunity to make huge percentage gains in a short period of time. Investing But such stocks could just as easily fall to zero. These securities do not meet the requirements to have a listing on a standard market exchange. Penny stocks are sold more than bought — mostly via tips that come your way in emails and newsletters. Like it couldn't go any higher and couldn't be a bargain? But trading penny stocks is also a good way to lose money. Submit Comment. Instead, Sykes says, focus on the profitable penny stocks with solid earnings growth and which are making week highs. Stick with stocks meaning of forex risk selling daily strategy trade at leastshares a day.

Why You Should Avoid Penny Stocks Like the Plague

Dollars and sense Penny stock promoters make sure to attach a disclaimer to their email, Twitter, or Facebook page, and take advantage of this language to embellish and deceive. Online Courses Consumer Products Insurance. Try to find the company's website, and if you do, see how professional it looks. Careful investors who steer clear of fraudulent deals may coinbase day trading fees fxcm fix protocol substantial profits in their future. Invest money in it regularly, and over many years, you should get wealthier. Advanced Search Submit entry for keyword results. There are even subscription-based websites focused on trading penny stocks that may be designed to entice unsuspecting investors. Submit Comment. Although it takes best online stock trading reviews is the us stock market going to crash concentration, use mental stops. Some companies behind penny stocks may eventually succeed and grow, but many are small and running on fumes, carrying a lot of debt and lacking the resources to pull off their strategy. To trade penny stocks successfully, you need to find the stocks that have the highest probability of going big. Investors and gamblers are also drawn to penny stocks because of the perceived opportunity to make huge percentage gains in a short period of time.

Follow SelenaMaranjian. Stock Advisor launched in February of To trade penny stocks successfully, you need to find the stocks that have the highest probability of going big. Penny stocks and their promoters also tend to stay one step ahead of securities regulators, though just last month the Securities and Exchange Commission charged a Florida-based firm, First Resource Group LLC, with penny-stock manipulation. They'll suggest that you can get in on the ground floor right now, and make huge profits, soon. Stock Trading Penny Stock Trading. Continue reading to find out about the extreme dangers of investing in penny stocks, especially how to detect and avoid the devious Pump and Dump scheme. Michael Sincere. And when the price spikes to multi-dollar levels, investors stand to gain handsomely. No one is looking to buy it. ET By Michael Sincere. Read more: Stock touts prey on investors' inflation fears. New investors are easily attracted to penny stocks because they can purchase a large number of shares for a low amount of money. What makes a penny stock a potential money-making stock? Once you find the high-quality companies, technical analysis can give you plenty of insight into the underlying shares. Timothy Sykes, a penny-stock expert who trades both long and short, says you must not believe the penny-stock stories that are touted in emails and on social media websites.

How to Make Money With Penny Stocks

Here's what it means for retail. Image via Flickr by mikecohen Read more: Simple rule: Don't buy a penny stock. If this happens, the stock moves to rsi 70 indicator how to tack your stocks on thinkorswim charts OTC market. Reverse Stock Split Definition A reverse stock split consolidates the number of existing shares of corporate stock into fewer, proportionally more valuable, shares. Even after finding a buyer, you may be forced to sell at a lower than expected price due to low liquidity. Michael Sincere. Are revenue and earnings at that company rising? Compare Accounts. Economic Calendar. Try to find the company's website, and if you do, see how professional it looks. What makes a penny stock a potential money-making stock? Considering all of this, the best hope of making money with penny stocks is finding the hidden gem, buying it at a bargain price, and holding on to it until the company rebuilds and gets back on a major market exchange. Keep the odds of investment success in your favor by always doing your own research. Through heavy and targeted promotion, the group behind the scam increases the demand and volume in the stock, which leads to a sharp rise in the day trade technical analysis nifty intraday pcr chart. Investing Getting to Know the Stock Exchanges. Penny stocks are a risky investment, but there are some ways to lower the risk and put yourself in a position for money-making penny stock trading.

To make money trading penny stocks, you first need to find someone to sell it to you at a bargain price. Penny stock promoters make sure to attach a disclaimer to their email, Twitter, or Facebook page, and take advantage of this language to embellish and deceive. Popular filters include chart patterns, price, performance, volume, and volatility, all of which can help you find the stocks with the greatest potential for a big run. Fool Podcasts. Who Is the Motley Fool? Follow SelenaMaranjian. Work from home is here to stay. It's very risky and should be avoided at all costs. He also suggests that you trade penny stocks that are priced at more than 50 cents a share. Look for smart management and clear communications from management, such as via a candid and informative annual letter to shareholders. Dollars and sense Penny stock promoters make sure to attach a disclaimer to their email, Twitter, or Facebook page, and take advantage of this language to embellish and deceive. Since the companies behind penny stocks are not held to the same financial reporting requirements as major companies, there is often a lack of legitimate financial information to determine whether the stock is a good investment. Like chart patterns, financial ratios can be used in conjunction with other analyses to determine the right penny stocks to trade.

10 ways to trade penny stocks

This article details guidelines to help investors navigate the often thorny penny stock minefield. If a technical analysis master the art of stock trading oanda renko charts company truly has strong fundamentals with a promising outlook for growth, serious institutional investors will already be buying the stock and driving the price higher. When it comes to technical analysis indicators, this is one of the most reliable indicators for penny stocks. These three characteristics help you determine a great penny stock to invest in and how to minimize your risk. Through heavy and targeted promotion, the group behind the scam increases the demand and volume in wealthfront calculator day trading buying power stock, which leads to a sharp rise in the price. Fool Podcasts. Part of the challenge in change btc to eth coinbase bittrex and btg how to make money trading penny stocks is finding. Penny stocks are a risky investment, but there are some ways to lower the risk and put yourself in a position for money-making penny stock trading. Favoring dividend payers is also a good. Search Search:. Penny stock promoters make sure to attach a disclaimer to their email, Twitter, or Facebook page, and take advantage of this language to embellish and deceive. Once you find the high-quality companies, technical analysis can give you plenty of insight into the underlying shares. Stay away from penny stocks or you will regret your decision many times. Author Bio Selena Maranjian has been writing for the Fool since and covers basic investing and personal finance topics. However, the unsuspecting investor who bought the promoted stock is now left holding a losing stock that has fallen in price due to this unethical and illegal act. So how can you build wealth? Here's a look at what penny stocks are -- and why you should avoid them like the plague. Plenty of factors could lead to a downturn in share price, even for the shares of a company that is still otherwise sound, reputable, and meeting the standards of the exchange.

But the hypesters bought their own shares earlier and have also benefited from the stock price surge -- and now they will sell their shares, "dumping" them and sending the shares crashing. The message was delivered in a way that made the victim think the message was accidental and intended for someone else. Yes, but they can also lose a lot of money. Cheap Stocks Are Cheap for a Reason! Consider the stock of Amazon. That seems "too high," right? There are even subscription-based websites focused on trading penny stocks that may be designed to entice unsuspecting investors. Penny stocks are used in classic pump-and-dump schemes, with investors excited about how the companies might soon prosper. Who Is the Motley Fool? This lower liquidity means you may be challenging to find a buyer for your penny stocks when you are ready to sell them. Popular Courses. Join Stock Advisor. Partner Links. Thousands of random phone calls were made to victims across the USA. This will help you avoid getting duped by the notorious and devious Pump and Dump scheme. However, if you can tolerate a little risk and think quickly on your feet, penny stock trading can be a great source of income with the potential for massive gains. For example, multiply a stock price by the company's total shares outstanding, and you'll arrive at its market capitalization -- its current value in the market.

3 Dangers of Investing in Penny Stocks

To make money trading penny stocks, you first need to find someone to sell it to you at a bargain price. If you think the latter scenario is more appealing, you've got plenty of company -- but you're also mistaken. Fool Podcasts. No one is looking to buy it. Through heavy and targeted promotion, the group behind the scam increases the demand and volume in the stock, which leads to a sharp rise in the price. Considering all of this, the best hope of making money with penny stocks is finding the hidden gem, buying it at a bargain price, and holding on to it until the company rebuilds and gets back on a major market exchange again. Locating an undervalued stock is incredibly difficult to begin with, since most investors have the next big money-making stock on the radar. Kodak's stock tumbles again, after disclosure that investors have converted debt into nearly 30 million common shares. If you make that kind of return with a penny stock, sell quickly. Here's a look at what penny stocks are -- and why you should avoid them like the plague. Careful investors who steer clear of fraudulent deals may see substantial profits in their future.

However, if you can tolerate a little risk and think quickly on your feet, penny stock trading can be a great does etrade cost money open account 5 best income stocks of income with the potential for massive gains. Penny stock investors should be aware of the following potential traps:. Search Search:. Submit Comment. If you find financial statements, do they show ample cash and little to no debt? Advanced Search Submit entry for keyword results. This article details guidelines to help why did health care services etfs drop interactive brokers asset under management navigate the often thorny penny stock minefield. To trade penny stocks successfully, you need to find the stocks tradingview rsi overlay gold usd have the highest probability of going big. Part of the challenge in determining how to make money trading penny stocks is finding. Who Is the Motley Fool? Considering all of this, the best hope of making money with penny stocks is finding the hidden gem, buying it at a bargain price, and holding on to it until the company rebuilds and gets back on a major market exchange. Penny stocks and their promoters also tend to stay one step ahead of securities regulators, though just last month the Securities and Exchange Commission charged a Florida-based firm, First Resource Group LLC, with penny-stock manipulation. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Read more: Simple rule: Don't buy a penny stock. Do penny stocks really make money? Are there links to many quarters' and years' worth of financial statements such as Qs and Ks filed with the SEC?

How to Find and Invest in Penny Stocks

The investor s behind the hype walks away with a big gain by selling into strength. Reading the disclaimers at the bottom of the email or newsletter, which the SEC requires them to do, will usually reveal a conflict of. Fool Podcasts. Like chart patterns, financial ratios can be used in conjunction with other analyses to determine the right penny stocks to trade. As such, penny stocks are not regulated nearly as tightly as stocks listed on a centralized stock exchange. That seems "too high," right? Popular Courses. Plenty of factors could lead to a downturn in share price, even for the shares of a company that is still otherwise sound, reputable, and meeting the standards of the exchange. Try a different kind of stock -- the promising kind. Pink sheet companies are not usually listed on a major exchange. These three box spread robinhood biz penny stock h help you determine a great penny stock to invest in and how to minimize your risk. Sykes says there is a difference between stocks making a week high based on an earnings breakout and stocks making a week high because three newsletters picked it. Planning for Retirement. If a company turnaround is expected, a trader is going to hold onto shares to reap the rewards, which makes these shares more difficult for you to buy. The average daily volume rocketed from less thanshares to nearly 1 million shares on several days. Marijuana over the counter stocks small cap stocks august 2020 Us.

Look for companies with little to no debt and ample cash on hand. But such stocks could just as easily fall to zero. This article details guidelines to help investors navigate the often thorny penny stock minefield. Are revenue and earnings at that company rising? Once you find the high-quality companies, technical analysis can give you plenty of insight into the underlying shares. Do penny stocks really make money? You need to do due diligence before investing in any stocks, but especially penny stocks. Avoiding Penny Stock Scams Investors who are promised high returns for low costs should be on the lookout for the following red flags , in order to avoid fraudulent deals:. These three characteristics help you determine a great penny stock to invest in and how to minimize your risk. ET By Michael Sincere. As such, the best stocks to invest in are usually not cheap—they are often the most expensive! Many people find it more exciting to own 2, shares than 15 shares, and it can make some folks feel richer, too. But the hypesters bought their own shares earlier and have also benefited from the stock price surge -- and now they will sell their shares, "dumping" them and sending the shares crashing. As mentioned above, trading penny stocks is risky. The Ascent. Fundamental analysis uses information about the company itself, such as management, debts, contracts, lawsuits, and revenues, while technical analysis uses patterns on a trading chart. What I've just described is the "pumping" part of the age-old "pump-and-dump" scheme. A Pump and Dump occurs when an investor or group of investors heavily promote a stock they are holding, then sell immediately after the stock price has risen due to the initial interest in the promotion.

Michael Sincere's Rookie Trader

Economic Calendar. Penny stocks are sold more than bought — mostly via tips that come your way in emails and newsletters. Sykes says there is a difference between stocks making a week high based on an earnings breakout and stocks making a week high because three newsletters picked it. Consider the stock of Amazon. Your email address will not be published. Partner Links. This will help you avoid getting duped by the notorious and devious Pump and Dump scheme. Penny stock promoters make sure to attach a disclaimer to their email, Twitter, or Facebook page, and take advantage of this language to embellish and deceive. You can get more meaning from stock prices by relating them to other numbers. If this happens, the stock moves to the OTC market. See what information it offers about itself and what it offers to investors. There are a few characteristics to look for:. When it comes to technical analysis indicators, this is one of the most reliable indicators for penny stocks. Reverse Stock Split Definition A reverse stock split consolidates the number of existing shares of corporate stock into fewer, proportionally more valuable, shares. With a relatively small investment you can make a nice return if — and this is a big if — the trade works out. If you trade stocks with low volume, it could be difficult to get out of your position. Popular Courses. Most penny stockbrokers heavily promote online trading by offering big discounts or cash-back offers. Penny stocks are a risky investment, but there are some ways to lower the risk and put yourself in a position for money-making penny stock trading.

This will help you avoid getting duped by the notorious and devious Pump and Dump scheme. You need to do due diligence before investing in any stocks, but especially penny stocks. Related Articles. New investors are easily attracted to penny stocks because they can purchase a large number of shares for a low amount of money. Yet it will probably have come to your attention because someone is hawking it online or hyping it in a newsletter. If you how to use hdfc trade mobile app investor swing trading that kind of return with a penny stock, sell quickly. Are revenue and earnings at that company rising? Cheap Stocks Are Cheap for a Reason! Although it takes more concentration, use mental stops. Consider the stock of Amazon. Traditional interpretation and usage of the relative strength index uses values of 70 or above to indicate the stock is overbought or overvalued, which may mean how often can you trade cryptocurrency lendconnect dashboard trend reversal or pullback is coming.

For many traders, scanners are the intraday overbought oversold etoro platform valuation way to do. Who Is the Motley Fool? Although it is technically possible to make a huge return on your investment in a short period of time, you must realize it is statistically not likely to happen. Many of these companies are fly-by-night and highly volatile, which puts traders in a position to lose big. He also suggests that you trade penny stocks that are priced at more than 50 cents a share. Popular filters include chart patterns, price, performance, volume, and volatility, all of which can help you find the stocks with the greatest potential for a big run. Follow SelenaMaranjian. There are even subscription-based websites focused on trading penny stocks that may be designed to entice unsuspecting investors. Look for companies with little to no debt and ample cash on hand. Penny Stock Trading Do penny stocks pay dividends? Penny stocks are sold more than bought — mostly via tips that come your way in emails and newsletters. Submit Comment. These three characteristics help you determine a great penny stock to invest in and is it better to trade futures best free crypto trading bot to minimize your risk. Savvy investors who have learned how to make money with penny stocks have the potential to make quick profits, but the vast majority of penny stock investors will lose their shirts. Like it couldn't go any higher and couldn't be a bargain? Compare Accounts. Sign Up Log In. Sykes says large rings of the same people run promotions using different press releases and companies, including the reappearance of a notorious stock manipulator who was first convicted for an email pump-and-dump scheme when he was in how can i buy etsy stock can you buy before the stock market opens robinhood school.

These money and investing stories were popular with MarketWatch readers over the past week. Consider the following list of regulated penny stock brokers in the United States:. Investopedia is part of the Dotdash publishing family. However, if you can tolerate a little risk and think quickly on your feet, penny stock trading can be a great source of income with the potential for massive gains. Stock Trading Penny Stock Trading. Even with these clear dangers, some people insist on trading the pennies. Stay away from penny stocks or you will regret your decision many times over. If you find financial statements, do they show ample cash and little to no debt? ET By Michael Sincere. Compare Accounts. Join Stock Advisor. Your email address will not be published. Related Articles. The Ascent. Online Courses Consumer Products Insurance.

Deep Discount Broker Definition A deep discount broker handles buys and sales of securities harami meaning in japanese candlesticks what is the macd and does it measure customers on exchanges at even lower commission rates than regular discount brokers. Like it couldn't go any higher and couldn't be a bargain? Careful investors who steer clear of fraudulent deals may see substantial profits in their future. There is nothing wrong with wanting exposure, but almost all what is momentum trading strategy covered call definition for dummies newsletters make false promises about their crappy companies. When it comes to technical analysis indicators, this is one of the most reliable indicators for penny stocks. For example, multiply a stock price by the company's total shares outstanding, and you'll arrive at its market capitalization -- its current value in the market. Try a different kind of stock -- the promising kind. Stock Market. On the bottom russell midcap index companies heart gold stock the chart, notice trading volume also dramatically surged in sync with the price gain. Many of these companies are fly-by-night and highly volatile, which puts traders in a position to lose big. By using Investopedia, you accept. No one is looking to buy it. Buying into penny stocks isn't investing -- it's speculating, or gambling. Consider the following list of regulated penny stock brokers in the United States:. For more financial and non-financial fare as well as silly thingsfollow her on Twitter You need to do due diligence before investing in any stocks, but especially penny stocks. Join Stock Advisor.

Although it is technically possible to make a huge return on your investment in a short period of time, you must realize it is statistically not likely to happen. On the bottom of the chart, notice trading volume also dramatically surged in sync with the price gain. Penny stocks listed on publications like the Pink Sheets may not have met these requirements, giving you less information to base your trading decisions on and carrying a greater risk. Planning for Retirement. Partner Links. Sign Up Log In. Image source: Getty Images. Retirement Planner. The Ascent. The OTC Bulletin Board, an electronic trading service operated by the Financial Industry Regulatory Authority, requires all companies to meet the minimum standards of keeping up-to-date financial statements. This will help you avoid getting duped by the notorious and devious Pump and Dump scheme. Follow SelenaMaranjian. Best Accounts. Related Articles.

Industries to Invest In. This will help you avoid getting duped by the notorious and devious Pump and Dump scheme. Investopedia uses cookies to provide you with a great user experience. If you find financial statements, do they show ample cash and little to no debt? Penny stocks and their promoters also tend to stay one step ahead of securities regulators, though just last month the Securities and Exchange Commission charged a China news bitcoin exchange how to get money out of bitstamp firm, First Resource Group LLC, with penny-stock manipulation. The OTC markets come into play when you consider where the penny stock is traded. Image source: Getty Images. When it comes to technical analysis indicators, this is one of the most reliable indicators for penny stocks. If you enter the penny stock arena, be cynical, do your own research, and diversify, even if a friends or family member is touting a stock. Feb 24, at AM. You can get more meaning from stock prices by relating them to other numbers. See what information it offers about itself and what it offers to investors.

Penny stocks and their promoters also tend to stay one step ahead of securities regulators, though just last month the Securities and Exchange Commission charged a Florida-based firm, First Resource Group LLC, with penny-stock manipulation. Do penny stocks really make money? Favoring dividend payers is also a good move. Work from home is here to stay. But some of them may not be listed on a major stock exchange, and all require a somewhat refined approach relative to other stocks. But the hypesters bought their own shares earlier and have also benefited from the stock price surge -- and now they will sell their shares, "dumping" them and sending the shares crashing. The Relative Strength Index RSI is a momentum oscillator that measures the speed and change of price movements on a scale of zero to The OTC markets come into play when you consider where the penny stock is traded. Stay away from penny stocks or you will regret your decision many times over. Join Stock Advisor. Consider the stock of Amazon. As mentioned above, trading penny stocks is risky. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Like other types of stock market trading, there are two types of analysis in stocks: fundamental and technical. If a company turnaround is expected, a trader is going to hold onto shares to reap the rewards, which makes these shares more difficult for you to buy. What I've just described is the "pumping" part of the age-old "pump-and-dump" scheme. The message was delivered in a way that made the victim think the message was accidental and intended for someone else.

Compare Accounts. But some of them may not be listed on a major stock exchange, and all require a somewhat refined approach relative to other stocks. Economic Calendar. Every penny link timeframes on thinkorswim profitability of oscillators used in technical analysis for financial company wants you think it has an exciting story that will revolutionize the world. Penny stocks are sold more than bought — mostly via tips that come your way in emails and newsletters. This lower liquidity means you may be challenging to find a buyer for your penny stocks when you are ready to sell. This will help you avoid getting duped by the notorious and devious Pump and Dump scheme. On the bottom of the chart, notice trading volume also dramatically surged in sync with the price gain. Latest Tweets MorpheusTrading. Here's a look at what penny stocks are -- and why you should avoid them like the plague.

Fundamental analysis uses information about the company itself, such as management, debts, contracts, lawsuits, and revenues, while technical analysis uses patterns on a trading chart. On the bottom of the chart, notice trading volume also dramatically surged in sync with the price gain. Fundamental analysis is the preferred method of most traders, though a combination of both analyses can prove more beneficial than using one over the other. Stock Market Basics. Cheap Stocks Are Cheap for a Reason! Leave shorting penny stocks to the pros. Getting Started. Since the companies behind penny stocks are not held to the same financial reporting requirements as major companies, there is often a lack of legitimate financial information to determine whether the stock is a good investment. Investopedia is part of the Dotdash publishing family. This will help you avoid getting duped by the notorious and devious Pump and Dump scheme. Technical analysis is a vast topic with plenty of individual strategies and indicators, but these are the most common and reliable indicators that work well for analyzing penny stocks. Although it takes more concentration, use mental stops. Look for smart management and clear communications from management, such as via a candid and informative annual letter to shareholders. Are revenue and earnings at that company rising? Every penny stock company wants you think it has an exciting story that will revolutionize the world. Like other types of stock market trading, there are two types of analysis in stocks: fundamental and technical. As mentioned above, trading penny stocks is risky. Who Is the Motley Fool? All that buying activity drives up the price, making those investors happy -- briefly.

4 Tiers of Penny Stocks

Careful investors who steer clear of fraudulent deals may see substantial profits in their future. There is no reliable business model or accurate data, so most penny stocks are scams that are created to enrich insiders. The offers that appear in this table are from partnerships from which Investopedia receives compensation. But such stocks could just as easily fall to zero. Are revenue and earnings at that company rising? No one is looking to buy it. Investing Getting to Know the Stock Exchanges. To trade penny stocks successfully, you need to find the stocks that have the highest probability of going big. Through heavy and targeted promotion, the group behind the scam increases the demand and volume in the stock, which leads to a sharp rise in the price. These securities do not meet the requirements to have a listing on a standard market exchange. Cheap Stocks Are Cheap for a Reason! Before getting into why these stocks are dangerous, let's look at why they're appealing. Transactional costs are more important with penny stocks than with higher-priced equities. Why MTG?

I aim for orbut not or Considering all of this, the best hope of making money with penny stocks is finding the hidden gem, buying it at a bargain price, and holding on to it until the company rebuilds and gets back on a major market exchange. But the hypesters bought iv rank thinkorswim tradingview fibinaci own shares earlier and have also benefited from the stock price surge -- and now they will sell their shares, "dumping" them and sending the shares crashing. If a legitimate company truly has strong fundamentals with a promising outlook for growth, best pot stock plays when did etfs start in the us institutional investors will already be buying the stock and driving the price higher. The OTC markets come into play when you consider where the penny stock is traded. Stock Market. With a relatively small investment you can make a nice return if — and this is a big if — worlds largest cryptocurrency exchange crypto exchanges leave japan trade works. Do penny stocks really make money? Best Accounts. Stock Trading Penny Stock Trading. Read more: Simple rule: Don't buy a penny stock. Join Stock Advisor. This will help bitcoin options futures buy ethereum through cex.io avoid getting duped by the notorious and devious Pump and Dump scheme. Every penny stock company wants you think it has an exciting story that will revolutionize the world.

These money and investing stories were popular with MarketWatch readers over the past week. Your Practice. Related Articles. Your email address will not be published. All that buying activity drives up the price, making those investors happy -- briefly. New investors are easily attracted to penny stocks because they can purchase a large number of shares for a low amount of money. Instead, Sykes says, focus on the profitable penny stocks with solid earnings growth and which are making week highs. And when the price spikes to multi-dollar levels, investors stand to gain handsomely. There are a few characteristics to look for:. Unfortunately, it's not a very easy goal to attain -- though you'll occasionally run across come-ons from the penny stock world that would suggest otherwise. What I've just described is the "pumping" part of the age-old "pump-and-dump" scheme. Try to find the company's website, and if you do, see how professional it looks. Investing Getting to Know the Stock Exchanges. Many of these companies are fly-by-night and highly volatile, which puts traders in a position to lose big. The OTC markets come into play when you consider where the penny stock is traded.