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How can I invest in Penny stocks?

Adam Morrison


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Hello, thank you for your question! 

The easiest way into the stock market for beginners is investing in penny stocks, which are shares trading at a price lower than $1. These types of prices offer beginner investors to allocate a certain amount of capital which is well in their limits and buy thousands of stocks. 

When there is a small return on a stock which is usually several cents, this translates into larger gains when there are thousands of stocks owned. In order to start investing in penny stocks, you need to open a trading account, which will allow you to deposit funds. You should select stocks you want to invest in and open buy positions.

Understanding the risks which come with penny stocks, such as low liquidity, large bid-ask spreads, and small market capitalization may help you to better understand the whole process.

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