Investing in penny stocks is not easy and it will require a lot of effort to buy these micro cap stocks. Penny stocks are not your standard stocks but these are very low value stocks in terms of the amount of money that these require to buy. These as the name suggests are less than a penny. However the definition varies.

The definition of penny stocks will mean that you can effectively buy shares for less than $5 or even less than $1. However this definition varies based on which exchange you are trading in because in some exchanges the definition of penny will mean less than dollar five. 

The penny stocks are generally very risky but what the heck that is where you will get huge amount of money and gain good returns. The returns of some of the penny shares have gone very high and that means that if you are an avid investor then you should get a penny stock broker who should be able to get you some good pink sheets penny stocks. Now pink sheets is the terms give to that class of stocks that are traded on the over the counter bulletin board or the OTCBB of the NASDAQ exchange. This NASDAQ exchange can be thought of as a very simple side trading mechanism for the low priced stocks called micro caps.

 

 As a guide it is always better to invest these in limited way in the penny stocks at first and then start investing in a big way once you have understood the mechanism of working the penny stock market. The penny stock market is a great way of making money as well as losing money. The best way is to find out the most promising stocks of the year by finding out which are the actual revenue generating companies. These revenue generating companies will then be able to give you good returns. Not all penny stocks are revenue generating companies and in fact a lot of these are highly risky shell companies serving as front end to a lot of promoters.

To answer the question about how and where to buy then these are no different than the normal shares and you can buy them via all the so called discount online brokers or you can find some specific brokers who are willing to deal with penny stocks. These shares are traded on the NYSE as well as NASDAQ but on NASDAQ they are traded on a special platform called the OTCBB. OTC bulletin board is a special service only for penny stocks.

The penny stock brokers do not go by the conventional commission and will not charge any money on the regulare trade but they make money because of the hug spread between buying and selling to common people like us. They simply buy shares are st some opportune time and then sell at a more opportune time to make money via the penny stocks.