Before you can begin day trading penny stocks, you need to understand what exactly is a penny stock. Query a collection of investors about the label of a stock trading under five dollars and they’ll provide several answers, including the labels penny stock, micro cap stock, or nano stock. For the most part, these three terms can be interchangeable.
For this page I’ll utilize both penny stocks and micro cap stocks, but while they can be used interchangeably, they do have slightly different meanings. Micro cap stocks are defined as such based on their market capitalization while penny stocks are defined by their specific price.
Either way, you need to understand that to buy penny stocks or micro cap stocks includes both potential reward… and great risk.
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