A Guide to Penny Stocks — From a Day Trader’s Perspective

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It seems like a match made in heaven, right? Penny stocks can have amazing runs, and day traders are gamblers, right?

Both are only sometimes true. Penny stocks do have several attractions:

• They’ve made some people wealthy in a hurry.
• Because investors can buy lots of shares cheaply, these stocks provide a special ego boost. (“Sorry I was late; I just bought 50,000 shares….”)
• The extremely low share price means you might be in on the ground floor of something that could theoretically grow to be the next household name.

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