Aug 31

The Important Players In The World Of Penny Stock Trading

by Malcolm Torren

New investors most often find the penny stock trading very
appealing for two reasons. One is because it is cheap. The
price range is between one to three dollars and not exceeding
five dollars. This is defined by the Securities and Exchange
Commission or the SEC. In actual practice, shares can even go
lower than a dollar each. The second magnet for new investors is
its high potential for fast profit at a short period of time.

How does penny stock trading work? Where does all the money come
from and where does it go? In penny stock trading, there are key
players that make a dynamic exchange of shares. The common goal
is to make money and reinvest. Here are the role players in the
business:

- The Investor. If you are an investor, you are playing a key
role in the stock market trading floor. The investment money
comes from you. Of course an investment cannot be an investment
if there is no intended profit to make. Some investors would
trade on to many shares. This is because if one of your stock
investments is losing, you can balance your profitability from
another source. You also make decisions of your trading. Why
and how?

- The Penny Stock Broker. You as the investor cannot make
transactions if there are no stock brokers to help you. They can
influence the market stocks. They have a high degree of
intelligence in the penny stock trading business. For every
profit you make, they earn by commission. They also have other
client investors to attend to. In some cases, penny stock
brokers charge for investment consultations to their clients.
But what exactly are they doing with your money?

- The Small Cap Companies – There won’t be any investment made if
there are no entities needing it. In the penny stock trading
market, they are call small cap companies. These are companies
that can either be newly established, wanting to expand their
business resources for business growth, or going bankrupt and
hoping to revitalize their financial resources. Whatever the
reasons may be, these entities are responsible for the dynamics
of your money.

- Stock Exchange – This is the venue where the buying and selling
of shares take place. The trading is done every business day.
All of the penny stock brokers meet at a huge spacious room they
call the trading floor. This is even shown in movies that
involve stock exchange scenarios.

- Securities and Exchange Commission – Of course, to keep the
entire procedure in penny stock trading orderly and discipline,
the SEC holds authority. They set the regulations and
guidelines, the requirements needed for companies to bid their
shares, and sometimes initiate the jailing of fraudsters who
conduct anomalous business here.

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New Unique Article!

Title: The Important Players In The World Of Penny Stock Trading
Author: Malcolm Torren
Keywords: penny stock trading,finance,stock market,stock trading,investing,business,online business
Word Count: 463
Category: Finance
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Originally posted 2008-07-05 08:03:52. Republished by Blog Post Promoter

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