About the NASDAQ Penny Stock Lists

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In today's world, penny stocks that trade on the NASDAQ involve penny stocks that trade in both Europe and the United States. Learn about the possibility of large charges to trade penny stocks with help from a portfolio manager in this free video on penny stocks and investments.

Part of the Video Series: Penny Stocks
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Video Transcript

Do you like to buy stocks that sell for less than a dollar? Hi, this is Roger Groh of Groh Asset Management. If you do, then you like to buy penny stocks. And today, we're here to talk about penny stocks that trade on the NASDAQ exchange. In today's world, that involves penny stocks that trade both in Europe and in the United States, as NASDAQ now has exchanges in both. I'd be very cautious about buying any penny stock just because of the fact that many of them have...don't have a product or maybe one or two. And certainly, the float is thin, usually. Last, but not least, the spreads may be very large, meaning it might trade once a month or twice a month, and the bid is 80 cents and the bid is...the ask is 80 cents and the bid is 40 cents. And unless you want to pay 80 and have it be worth 40 30 seconds later, I'd be very cautious about trading anywhere in penny stocks. Many penny stocks, though, trade off the board, so you can go into nasdaq.com, get the list, and then maybe try and find other places to buy them. It might be worth calling the trader or the company, tell them that you're an interested buyer or seller, and asking them to notify you if there is any pending block on either side that you could help them offset. That may help reduce that spread because make no mistake about it, spread is commission. Plus, you may find yourself paying hefty charges to trade these things because you need to buy a lot of shares at 50 cents to make a big block. And if you're paying a dime a share or 15 or whatever it might be, boy, it adds up quick. Last, but not least, you may want to wrap any trades that you do like this. Wrap meaning where you've paid a flat commission and you're not subject to the per share charge. Also, if you can find a trader who trades these in-house, including the NASDAQ, they're obligated to either trade away or give them to you at the bid side. So that's another way to help reduce the commission or spread. NASDAQ's a good place to start -- nasdaq.com -- and even both look in Europe and here. I'm Roger Groh of Groh Asset. Thank you very much for spending time with me.


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