S&P 500   3,852.36
DOW   32,920.46
QQQ   300.92
15 Ways to Improve Your Credit
Cash Holders STILL Aren't Taking Steps to Prepare (Ad)
These 2 Healthcare Stocks Have Doubled in 2023
Pfizer Stock: What the Bulls and Bears are Getting Wrong
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Bed Bath & Beyond Is Circling the Drain
AMD Results Are No Reason To Buy Semiconductors... Yet
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Allegro Microsystems Is A Well-Positioned Semiconductor Stock
Institutions are Buying up Procter & Gamble Shares, Should you?
S&P 500   3,852.36
DOW   32,920.46
QQQ   300.92
15 Ways to Improve Your Credit
Cash Holders STILL Aren't Taking Steps to Prepare (Ad)
These 2 Healthcare Stocks Have Doubled in 2023
Pfizer Stock: What the Bulls and Bears are Getting Wrong
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Bed Bath & Beyond Is Circling the Drain
AMD Results Are No Reason To Buy Semiconductors... Yet
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Allegro Microsystems Is A Well-Positioned Semiconductor Stock
Institutions are Buying up Procter & Gamble Shares, Should you?
S&P 500   3,852.36
DOW   32,920.46
QQQ   300.92
15 Ways to Improve Your Credit
Cash Holders STILL Aren't Taking Steps to Prepare (Ad)
These 2 Healthcare Stocks Have Doubled in 2023
Pfizer Stock: What the Bulls and Bears are Getting Wrong
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Bed Bath & Beyond Is Circling the Drain
AMD Results Are No Reason To Buy Semiconductors... Yet
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Allegro Microsystems Is A Well-Positioned Semiconductor Stock
Institutions are Buying up Procter & Gamble Shares, Should you?
S&P 500   3,852.36
DOW   32,920.46
QQQ   300.92
15 Ways to Improve Your Credit
Cash Holders STILL Aren't Taking Steps to Prepare (Ad)
These 2 Healthcare Stocks Have Doubled in 2023
Pfizer Stock: What the Bulls and Bears are Getting Wrong
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Bed Bath & Beyond Is Circling the Drain
AMD Results Are No Reason To Buy Semiconductors... Yet
Know Your Profit Potential BEFORE You Trade! (Ad)pixel
Allegro Microsystems Is A Well-Positioned Semiconductor Stock
Institutions are Buying up Procter & Gamble Shares, Should you?

Penny Stocks

Penny stocks are public companies that have a current share price of $1.00 or less. These companies are listed on major stock exchanges and have market capitalizations of under $100 million. Many investors are attracted to penny stock investments because their low share prices suggest a strong possible upside. The table below lists public companies with share prices under $1.00 that have had the highest trading volume during the most recent trading day. Learn more about penny stocks.

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
Available with a MarketBeat All Access Subscription
MarketRank™Upgrade to All Access to use the All Ranks Filter
Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
Available with a MarketBeat All Access Subscription
Media SentimentUpgrade to All Access to use the All Sentiments Filter
Analyst consensus is the average investment recommendation among Wall Street research analysts.
Available with a MarketBeat All Access Subscription
Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PricePE RatioMarket CapVolumeAverage VolumeIndicator(s)
Mullen Automotive, Inc. stock logo
MULN
Mullen Automotive
$0.35
+2.2%
N/A$596.00 million146.95 million249.67 million
Faraday Future Intelligent Electric Inc. stock logo
FFIE
Faraday Future Intelligent Electric
$0.89
+4.9%
N/A$401.59 million56.17 million55.34 millionPositive News
SharpLink Gaming Ltd. stock logo
SBET
SharpLink Gaming
$0.77
+42.6%
N/A$17.22 million32.34 million1.70 millionPositive News
Gap Up
High Trading Volume
Flora Growth Corp. stock logo
FLGC
Flora Growth
$0.41
+40.0%
N/A$31.45 million41.53 million3.66 millionAnalyst Report
High Trading Volume
Sorrento Therapeutics, Inc. stock logo
SRNE
Sorrento Therapeutics
$0.96
N/A$453.01 million16.08 million13.16 millionAnalyst Report
Analyst Revision
ContextLogic Inc. stock logo
WISH
ContextLogic
$0.72
+4.0%
N/A$484.12 million21.43 million19.00 millionNews Coverage
Helbiz, Inc. stock logo
HLBZ
Helbiz
$0.24
+5.5%
N/A$22.63 million45.90 million127.41 millionGap Down
Recruiter.com Group, Inc. stock logo
RCRT
Recruiter.com Group
$0.65
+32.7%
N/A$10.58 million13.66 million687,486News Coverage
Positive News
Gap Up
High Trading Volume
TransCode Therapeutics, Inc. stock logo
RNAZ
TransCode Therapeutics
$0.87
+16.0%
N/A$11.31 million9.96 million1.21 millionNews Coverage
Positive News
Gap Up
High Trading Volume
Avaya Holdings Corp. stock logo
AVYA
Avaya
$0.41
+13.7%
N/A$34.86 million19.85 million18.11 millionUpcoming Earnings
Shift Technologies, Inc. stock logo
SFT
Shift Technologies
$0.28
+37.5%
N/A$23.89 million20.30 million4.91 millionGap Up
High Trading Volume
Core Scientific, Inc. stock logo
CORZ
Core Scientific
$0.35
+3.0%
N/A$126.82 million15.47 million11.62 millionGap Up
Skillz Inc. stock logo
SKLZ
Skillz
$0.81
+0.7%
N/A$338.38 million6.39 million9.46 millionGap Up
FaZe Holdings Inc. stock logo
FAZE
FaZe
$0.83
-4.1%
N/A$60.47 million5.86 million1.97 millionOptions Volume
Gap Down
High Trading Volume
Powerbridge Technologies Co., Ltd. stock logo
PBTS
Powerbridge Technologies
$0.11
-7.5%
N/A$14.80 million43.17 million17.27 millionPositive News
High Trading Volume
Spectrum Pharmaceuticals, Inc. stock logo
SPPI
Spectrum Pharmaceuticals
$0.85
+21.4%
N/A$159.94 million4.88 million1.78 millionAnalyst Report
High Trading Volume
Cenntro Electric Group Limited stock logo
CENN
Cenntro Electric Group
$0.79
+3.0%
N/A$205.31 million4.75 million5.67 millionNews Coverage
Chembio Diagnostics, Inc. stock logo
CEMI
Chembio Diagnostics
$0.44
+23.3%
N/A$16.30 million7.94 million972,996Analyst Report
News Coverage
Gap Up
High Trading Volume
SmileDirectClub, Inc. stock logo
SDC
SmileDirectClub
$0.64
+11.6%
N/A$248.62 million5.44 million4.33 million
Arrival stock logo
ARVL
Arrival
$0.38
-5.5%
N/A$241.27 million8.37 million22.35 millionGap Down
Hyperfine, Inc. stock logo
HYPR
Hyperfine
$0.99
+3.1%
N/A$70.04 million3.11 million1.53 millionGap Down
High Trading Volume
Vinco Ventures, Inc. stock logo
BBIG
Vinco Ventures
$0.69
-6.6%
N/A$160.98 million4.00 million7.94 millionPositive News
Gap Down
Troika Media Group, Inc. stock logo
TRKA
Troika Media Group
$0.20
-3.9%
N/A$13.71 million13.46 million18.28 millionPositive News
Gap Down
Ideanomics, Inc. stock logo
IDEX
Ideanomics
$0.20
N/A$120.25 million12.74 million11.89 million
COMSovereign Holding Corp. stock logo
COMS
COMSovereign
$0.07
-6.9%
N/A$17.62 million34.13 million51.06 millionUpcoming Earnings
Gap Down
GeoVax Labs, Inc. stock logo
GOVX
GeoVax Labs
$0.90
+10.8%
N/A$23.60 million2.76 million4.50 millionAnalyst Report
Lightning eMotors, Inc. stock logo
ZEV
Lightning eMotors
$1.00
+14.8%
2.12$89.59 million2.48 million2.30 millionGap Up
WGS
GeneDx
$0.38
-9.4%
N/A$145.13 million6.17 million2.97 millionPositive News
Gap Up
High Trading Volume
VivoPower International PLC stock logo
VVPR
VivoPower International
$0.99
+6.3%
N/A$23.14 million2.32 million1.07 millionPositive News
High Trading Volume
Diversified Healthcare Trust stock logo
DHC
Diversified Healthcare Trust
$0.73
-7.3%
0.42$175.87 million3.04 million3.02 millionPositive News
Super League Gaming, Inc. stock logo
SLGG
Super League Gaming
$0.72
+8.4%
N/A$26.95 million3.02 million420,161Gap Up
High Trading Volume
Adial Pharmaceuticals, Inc. stock logo
ADIL
Adial Pharmaceuticals
$0.46
-3.2%
N/A$11.89 million4.50 million434,496News Coverage
Gap Up
High Trading Volume
VEON Ltd. stock logo
VEON
VEON
$0.60
+19.4%
N/A$1.05 billion3.34 million1.33 millionHigh Trading Volume
Boxed, Inc. stock logo
BOXD
Boxed
$0.61
+14.8%
N/A$44.66 million3.00 million4.40 millionGap Up
Lottery.com Inc. stock logo
LTRY
Lottery.com
$0.41
+28.9%
N/A$20.71 million4.48 million719,461Gap Up
High Trading Volume
Aethlon Medical, Inc. stock logo
AEMD
Aethlon Medical
$0.70
+20.7%
N/A$11.65 million2.50 million2.71 millionGap Down
CN Energy Group. Inc. stock logo
CNEY
CN Energy Group.
$0.48
-2.0%
N/A$20.37 million3.62 million2.34 millionPositive News
Seanergy Maritime Holdings Corp. stock logo
SHIP
Seanergy Maritime
$0.62
+6.1%
3.09$94.49 million2.78 million2.10 millionPositive News
RedHill Biopharma Ltd. stock logo
RDHL
RedHill Biopharma
$0.23
+3.2%
N/A$14.41 million6.82 million12.40 millionGap Down
Volta Inc. stock logo
VLTA
Volta
$0.86
N/A$144.74 million1.79 million5.59 million
Greenidge Generation Holdings Inc. stock logo
GREE
Greenidge Generation
$0.86
+2.4%
N/A$36.95 million1.71 million2.73 million
Elys Game Technology, Corp. stock logo
ELYS
Elys Game Technology
$0.74
+8.3%
N/A$22.47 million1.97 million2.18 millionGap Up
Sema4 Holdings Corp. stock logo
SMFR
Sema4
$0.42
+5.8%
N/A$160.26 million3.41 million2.37 millionGap Up
GBS Inc. stock logo
GBS
GBS
$0.85
-5.7%
N/A$12.65 million1.67 million955,325Gap Up
VistaGen Therapeutics, Inc. stock logo
VTGN
VistaGen Therapeutics
$0.25
-4.2%
N/A$51.28 million5.63 million7.14 millionUpcoming Earnings
Gap Up
Instil Bio, Inc. stock logo
TIL
Instil Bio
$0.87
+6.5%
N/A$112.44 million1.51 million1.46 millionPositive News
Guardforce AI Co., Limited stock logo
GFAI
Guardforce AI
$0.25
N/A$10.54 million5.02 million6.68 million
Verb Technology Company, Inc. stock logo
VERB
Verb Technology
$0.20
N/A$20.66 million6.12 million13.82 million
Genius Brands International, Inc. stock logo
GNUS
Genius Brands International
$0.71
-2.5%
N/A$225.42 million1.63 million1.79 millionPositive News
Astra Space, Inc. stock logo
ASTR
Astra Space
$0.62
-2.5%
N/A$165.83 million1.87 million1.98 million
Rigetti Computing, Inc. stock logo
RGTI
Rigetti Computing
$0.80
+2.5%
N/A$98.42 million1.42 million678,551Positive News
High Trading Volume
Intelligent Bio Solutions Inc. stock logo
INBS
Intelligent Bio Solutions
$0.77
-8.9%
N/A$14.20 million1.37 million9.36 millionPositive News
Gap Down
Cortexyme, Inc. stock logo
CRTX
Cortexyme
$0.98
-2.0%
N/A$29.55 million1.05 million620,672News Coverage
Gap Down
Farmmi, Inc. stock logo
FAMI
Farmmi
$0.86
+12.4%
N/A$19.17 million1.16 million348,668High Trading Volume
Imperial Petroleum Inc. stock logo
IMPP
Imperial Petroleum
$0.26
N/A$36.72 million3.72 million4.52 millionPositive News
Akebia Therapeutics, Inc. stock logo
AKBA
Akebia Therapeutics
$0.67
+6.3%
N/A$123.25 million1.40 million1.60 million
Organigram Holdings Inc. stock logo
OGI
Organigram
$0.95
+4.3%
N/A$297.57 million975,9881.33 million
Evelo Biosciences, Inc. stock logo
EVLO
Evelo Biosciences
$0.78
-25.1%
N/A$84.11 million1.19 million168,936Analyst Downgrade
News Coverage
Gap Down
High Trading Volume
Hycroft Mining Holding Co. stock logo
HYMC
Hycroft Mining
$0.60
N/A$119.78 million1.51 million1.96 millionInsider Selling
Stronghold Digital Mining, Inc. stock logo
SDIG
Stronghold Digital Mining
$0.60
+9.1%
N/A$30.80 million1.43 million1.61 millionPositive News
AEye, Inc. stock logo
LIDR
AEye
$0.71
+14.3%
N/A$115.08 million1.15 million545,423Short Interest ↓
News Coverage
Gap Up
High Trading Volume
Cazoo Group Ltd stock logo
CZOO
Cazoo Group
$0.22
+5.9%
N/A$169.60 million3.59 million2.33 million
Lucira Health, Inc. stock logo
LHDX
Lucira Health
$0.39
-5.5%
N/A$15.73 million2.03 million14.96 millionGap Down
Bright Health Group, Inc. stock logo
BHG
Bright Health Group
$0.95
+7.4%
N/A$599.41 million804,5281.50 millionNews Coverage
Sesen Bio, Inc. stock logo
SESN
Sesen Bio
$0.59
-4.5%
N/A$119.67 million1.24 million768,809Positive News
Mereo BioPharma Group plc stock logo
MREO
Mereo BioPharma Group
$0.97
+3.7%
N/A$121.24 million729,591828,464Positive News
Celularity Inc. stock logo
CELU
Celularity
$0.91
+8.5%
N/A$132.18 million769,799823,413Analyst Report
Analyst Revision
Gap Up
Oncorus, Inc. stock logo
ONCR
Oncorus
$0.43
-4.0%
N/A$11.09 million1.57 million670,355Positive News
High Trading Volume
Blackboxstocks Inc. stock logo
BLBX
Blackboxstocks
$0.79
+10.3%
N/A$10.45 million801,320695,461Positive News
Gap Down
SelectQuote, Inc. stock logo
SLQT
SelectQuote
$0.85
-1.6%
N/A$143.57 million725,057699,927Upcoming Earnings
Creatd, Inc. stock logo
CRTD
Creatd
$0.69
+3.8%
N/A$26.80 million864,7471.04 million
Quince Therapeutics, Inc. stock logo
QNCX
Quince Therapeutics
$0.94
-3.7%
N/A$34.11 million622,0523.46 million
Northern Lights Acquisition Corp. stock logo
NLIT
Northern Lights Acquisition
$0.92
-9.8%
N/A$13.71 million601,19176,109Gap Down
High Trading Volume
SHF Holdings, Inc. stock logo
SHFS
SHF
$0.92
-9.8%
N/A$24.44 million601,191277,080Positive News
Gap Down
High Trading Volume
Latch, Inc. stock logo
LTCH
Latch
$0.89
-2.8%
N/A$129.48 million614,510461,689Gap Up
Compugen Ltd. stock logo
CGEN
Compugen
$0.87
N/A$75.26 million630,756611,752Gap Down
Sphere 3D Corp. stock logo
ANY
Sphere 3D
$0.38
N/A$24.22 million1.40 million2.04 millionGap Up
Amesite Inc. stock logo
AMST
Amesite
$0.35
-11.0%
N/A$10.51 million1.50 million2.50 millionGap Down
MoneyLion Inc. stock logo
ML
MoneyLion
$0.79
N/A$200.66 million650,080600,645
Heliogen, Inc. stock logo
HLGN
Heliogen
$0.67
+4.4%
N/A$126.66 million737,104887,587Gap Up
Owlet, Inc. stock logo
OWLT
Owlet
$0.39
-5.8%
N/A$44.23 million1.27 million313,363Gap Down
High Trading Volume
Curis, Inc. stock logo
CRIS
Curis
$0.73
-1.1%
N/A$69.89 million658,167710,376Gap Up
Bird Global Inc stock logo
BRDS
Bird Global
$0.25
+5.3%
N/A$70.43 million1.93 million2.21 million
IronNet, Inc. stock logo
IRNT
IronNet
$0.38
-4.7%
N/A$39.43 million1.24 million2.89 million
AVROBIO, Inc. stock logo
AVRO
AVROBIO
$0.93
+2.2%
N/A$40.71 million489,415307,230
Otonomo Technologies Ltd. stock logo
OTMO
Otonomo Technologies
$0.53
+1.2%
N/A$70.49 million856,443193,293News Coverage
Positive News
High Trading Volume
Healthcare Triangle, Inc. stock logo
HCTI
Healthcare Triangle
$0.31
-8.6%
N/A$13.05 million1.43 million1.17 millionNews Coverage
Gap Up
Calyxt, Inc. stock logo
CLXT
Calyxt
$0.40
+8.3%
N/A$19.30 million1.13 million5.19 million
View, Inc. stock logo
VIEW
View
$0.84
+2.1%
N/A$185.38 million523,727794,692Positive News
Gap Up
Boxlight Co. stock logo
BOXL
Boxlight
$0.45
-3.1%
N/A$33.21 million975,382725,546Gap Up
Aridis Pharmaceuticals, Inc. stock logo
ARDS
Aridis Pharmaceuticals
$0.70
+4.1%
N/A$14.52 million619,2572.33 millionAnalyst Revision
Yunji Inc. stock logo
YJ
Yunji
$0.56
-6.1%
N/A$119.58 million773,882411,345Gap Down
Minerva Surgical, Inc. stock logo
UTRS
Minerva Surgical
$0.40
+5.0%
N/A$11.94 million1.07 million2.90 millionPositive News
The Beachbody Company, Inc. stock logo
BODY
Beachbody
$0.66
+6.6%
N/A$206.68 million636,063362,237
Alaunos Therapeutics, Inc. stock logo
TCRT
Alaunos Therapeutics
$0.71
-3.6%
N/A$153.96 million568,992961,584Positive News
WeTrade Group, Inc. stock logo
WETG
WeTrade Group
$0.30
-3.2%
N/A$59.33 million1.27 million963,492
Clever Leaves Holdings Inc. stock logo
CLVR
Clever Leaves
$0.57
+14.4%
N/A$24.94 million666,126258,396Short Interest ↓
Positive News
High Trading Volume
PAVmed Inc. stock logo
PAVM
PAVmed
$0.51
N/A$46.59 million717,682539,190Positive News
Gap Down
Surface Oncology, Inc. stock logo
SURF
Surface Oncology
$0.97
+3.8%
N/A$58.72 million377,621271,869Positive News
BEST Inc. stock logo
BEST
BEST
$0.87
+10.1%
0.42$69.14 million420,314192,803Positive News
Gap Down
High Trading Volume
Penny Stocks, What You Need To Know

Penny stocks have advantages and obstacles that make it a unique asset class

You’re familiar with the phrase “you get what you pay for.” In the case of penny stocks, investors are hoping to get much more than they pay for. And penny stocks are an asset class that can deliver a large reward for a small risk. In this article, we’ll provide a definition of what a penny stock is, where you can find penny socks, whether penny stocks are a good investment, and some strategies to make money in penny stocks.

Forty years ago, a penny stock was defined as a stock that traded for under one dollar. They were stocks that investors could buy for literally pennies on the dollar. Some investors still believe that a stock is only a penny stock if it trades for $1 or less.

However, the Securities & Exchange Commission (SEC) defines a penny stock as one that trades for less than $5 a share. And some investors may even take an even more liberal definition of a penny stock to include any stock that trades under $10.

Whatever definition you use, the attraction of penny stocks is easy to see. Penny stocks offer the opportunity of a high return for a relatively minimal investment. For example, an investor who bought shares of a stock that was trading for 50 cents would only need the stock to rise to 75 cents to realize a 50% profit. Some investors also love by the idea that the low cost of entry allows them to buy a large quantity of shares, further increasing their potential reward.

Many people who dabble in penny stocks are speculators, even gamblers. They are attracted to the potential reward of these stocks. They are driven by technical signals more than fundamental analysis.

All penny stock companies have some level of risk; otherwise, they would draw the attention of institutional investors. In which case, their share price would be much higher. But why are they risky? There are two primary reasons:

The Company is Not Financially Healthy - First, they are usually highly leveraged and in some cases may even be in bankruptcy. Second, they generally have a small market cap, which means the value of their outstanding shares is low. These companies can offer the potential for sensational growth, but also increase investor risk.

Think about the fundamentals that many institutional investors look for when investing in a company.

  • What is the company’s debt-to-income ratio (i.e. do they have liquidity)?
  • Do they have growing revenue and earnings?
  • Do they have a competitive advantage in the marketplace and/or a moat that keeps competitors away?

Almost by definition, a company whose stock trades as a penny stock will fall short on the first two points. And on the last one, they may have a product that promises a competitive benefit, but for whatever reason it may not be seeded in the market yet.

Good examples of this are biotech companies. These companies may be working potentially breakthrough drugs and therapeutics. However, these companies are subject to strict regulations and must go through a series of clinical trials before turning a profit or even beginning to deliver revenue.

Potential for Fraud - However, any time investors put their money into a volatile investment, there is a high degree of risk. What can make penny stocks riskier is the potential for fraud. This can manifest itself in many forms.

An investor may learn about a company from a newsletter that promises meteoric gains. These newsletters can appear very credible. However, if you read the disclaimers, you’ll find that in many cases, the company was paying the newsletter editor for their endorsement. This should be a gigantic red flag for you because if a company was a legitimately good investment, it wouldn’t need to pay to get an endorsement.

There are penny stocks listed on the major exchanges (i.e. Nasdaq, NYSE). To be listed on one of the major exchanges, companies have to file with the Securities and Exchange Commission (SEC) and meet all their minimum filing requirements. While this can give you confidence that the company is legitimate, the fact that they are regulated removes some of the speculative nature of these stocks.

And it’s their speculative nature that makes these stocks appealing to many investors. However, “let the buyer beware” is very applicable when you look beyond the major exchanges to find a penny stock to invest in.

Penny stocks are primarily listed in two places: the Pink Sheets and the Over-the-Counter Bulletin Board (OTCBB).  The pink sheets are a compilation of daily publications by the National Quotation Bureau. The companies listed on the pink sheets do not have to file with the SEC and do not need to meet minimum filing requirements, such as submitting a recent financial report.

The penny stocks that are found on the OTCBB are still not listed on any of the major exchanges, but they do have to meet some minimum requirements. All of this means that you, as an investor, will have a lack of information. And when it comes to deciding where to invest your money, information is power.

Despite their inherently risky nature, you can make money in penny stocks. Like investing in any asset class, investors can take simple steps to minimize risk.

Limit Exposure - Most experts say an investor’s exposure to penny stocks should be no more than 5-10 percent of their portfolio. These same experts suggest, as a best practice, they limit their exposure to any individual penny stock to 1 or 2 percent of your portfolio. This reinforces a fundamental point that investors shouldn’t invest any more money in an asset class than they are comfortable losing.

Think of Penny Stocks as Short-Term Investments – If an investor profits off of a penny stock, they should look to sell and invest that money into their long-term investments. This will help to avoid losses and keep their exposure to penny stocks at a comfortable level.

Buy Penny Stocks With High Liquidity – This helps to ensure that investors can easily trade these stocks. One way to do this is to look at the average daily trading volume. Since it’s possible to own a large number of shares, it’s important to pick stocks that allow investors to sell a large number of these shares if necessary. In some cases, if the volume of a stock is only 1,500 shares a day and an investor owns over 15,000 shares, that means there aren’t enough buyers to get out of a position quickly.

Avoid Special Fees or Volume Restrictions -  Since investors will be looking to trade these stocks rather quickly, they should use a trading platform that is not going to charge special fees or put in volume restrictions. Essentially, investors need to be able to trade these stocks just like any other common stock.

Trade a Watch List Before Committing Real Dollars - An old-school tip that can help investors decide if a stock is worth your risk, particular for beginners, is to consider paper trading. This is a very simple concept where investors invest an imaginary amount of money and then track your trades without exposing actual money. This helps investors see how quickly a stock is moving and how much volume is changing hands. Many investment platforms make it easy to track your watch list.

Perform Due Diligence - It may be tempting to invest in the latest “hot stock or industry”. The penny stock industry is littered with companies that advertise the potential to make money in oil, gas, gold and other precious metals. However, if information about a company is not readily available, or if a company seems reluctant to provide that information, then it’s a sign to look for another investment.

Another good mantra to remember with penny stocks is to focus on companies where you may have some interest and/or expertise. After all, if you are a programmer, you will be much more likely to separate a tech guru’s hype from real innovation.

There are many good stock screening services available to help you find potential penny stock companies. This should not be the extent of your research, but it could help you create a quick short list in an industry that you can then individually research. Considering there are, literally hundreds of penny stock companies, having a tool that can help you uncover potential candidates can help focus your efforts.

While no investment is without risks, penny stocks are particularly risky investments. To begin with, it can be difficult to understand the real value of a penny stock company. Is this a company that has a realistic opportunity to get a product to market at scale? Is this an established company that is going through a difficult time?

At the depth of the financial crisis in 2009, there were several companies who had drifted down to the level of penny stocks. In some cases, you can find one of these companies and snap them up when they are going through a rough cycle. On the other end, you may be looking at startup companies that are looking for investment capital with the promise of a high return on your investment. In some cases, unfortunately, the promise is more hype than hope and you can quickly lose your entire investment.

To invest in penny stocks, you should remember that if it seems too good to be true, it usually is. However, does that mean you should stay away from penny stocks? Not necessarily. If you limit your exposure to penny stocks, apply the same principles you would apply to your other investments, and have both the time and the ability to move quickly in and out of your trades, there can be the potential to make money.

More Stock Ideas from MarketBeat