Expert: Steve Hach - 11/19/2010

Question
Say you buy 3000 of the latest hot penny stocks (zane), like what's usually on the running ticker symbol as well, will they sell at 3000 shares at 3-5 pennies above the brought price?  Also what do you have to watch out for (worst case scenirio wise) of the bought stocks not selling? (ex:  level 2 aproximations of not selling stocks...?) etc..


thanks in advance

Answer
Richie,

there is never a guarantee that any stock is going to sell for more than you paid for it...

the worst case scenario is that the company whose stock you bought goes bankrupt and you lose all of your money.

Penny stocks are penny stocks for a reason, the company is not thought to be worth much and therefore the stock price is close to zero.

Of course, some stocks are worth a risk--SiriusXM at 30 cents is not the same as the typical stuff you see below a dollar.

Some of the really good names that were trading cheap at the market bottom in March 2009 would provide other examples.

The main thing to remember is that there is always risk with any investment and that you should NEVER think that something is going to go up just because you bought it.

Get rich schemes, "strategies" that claim to be fool proof, etc. are rip offs and you need to keep your hand on your wallet when considering them.

Best,

Steve