How to Make a Substantial Income in Penny Stocks

A share of a penny stock could be bought for a penny.

There is no sure-fire way to make substantial amounts of money on penny stocks. However, it is possible to make a significant amount of money without a large investment. At the same time, it is just as easy to lose your initial investment. Penny stocks trade very cheap, usually for pennies a share. Penny stocks are very high risk, but investors like the speculative nature of the stocks. As with any investment, conduct proper research before investing.

Instructions

1. Research the penny stock you want to invest in. For example, after research person A decides to purchase stock in Firm A.

2. Purchase the penny stock you researched. There are many tools to purchase stock such as online stock brokers or your normal stock broker. In the example, Firm A stock is selling at $0.01 a share. Person A buys $100 worth of shares, equaling 10,000 shares.

3. Allow the penny stock to go up in price. Not all stocks will go up, this just highlights how profits can be made if the stock does go up. In the example, Firm A's stock rises 2 cents to $0.03 a share. Person A's profits are 10,000 shares times $0.02; a $200 profit.

References

• Investopedia: Penny Stock