Penny stocks (also known as pennies) are quite common to increase by 50 percent-100 percent in one day. In fact, with pennies often enough, you’ll see a 1000 percent increase that, although people talk about it when this happens, it’s not shocking. With mid caps and large caps trading on the NYSE and NASDEQ, you will never see this kind of increase. You’re not actually going to see this either with small caps trading in the penny stock range (less than $ 5/share). A stock that is not a penny stock was the largest single-day winner on April 18, 2008. Google’s search engine rose 20 percent that day. This was such BIG news that people are STILL talking about it, but a 20 percent increase is so common in the penny stock world that it would hardly have registered as single day news. See the profit potential difference?!
So, WHY do penny stocks have so much more potential for profit than other stocks?
Penny stocks trade more volatility than other stocks and are much more upside-down. If you have a method to identify these pennies with good business fundamentals and strong growth potential, the profit you can make is truly amazing. How fast this can happen is what’s even more amazing. With a relatively small investment, I made thousands of dollars in a single day.
Companies trading at higher stock prices and with higher market caps are typically at a different stage of development than those trading as penny stocks. While the more mature companies can provide a long-term investor with steady growth, they do not have the same potential as the pennies can to skyrocket in price.
If you are interested in a very large profits over a short span of time, you’ll need to trade penny stocks.
Here’s another reason a penny stock, unlike other stocks, can make a sudden and very dramatic price jump. American firms trading above $ 5/share with large market caps are almost always trading on NSYE and NASDAQ – and to a lesser extent on AMEX. These are sometimes called the “big boards” and are required to submit all kinds of financial reports with this privilege. Every financial institution out there is constantly under the microscope and scrutinizing them. Financial experts pour over their financial reports and each detail is discussed ad nauseum on cable financial shows, websites and other venues. For even a day, NOTHING remains hidden. Depending on each detail that comes out, stocks will tick up and down as it comes out.