0.0001 Stocks

0.0001 Stocks

So what’s the big deal with 0.0001 stocks? You hear about them all the time on penny stock message boards or forums, and the general consensus is normally that any stocks going for this price are automatically considered to be a “hot opportunity”. For the most part, you’ll find stocks trading in the 0.0001 range on the Over-the-Counter Bulletin Board Exchange (or OTCBB for short). Many investment advisors strongly urge their clients to stay the heck away from the OTCBB market completely due to the wild-but-powerful swings in price that most of those stocks tend to experience. The OTCBB market doesn’t have the same degree of stringent regulations and oversight as do the NASDAQ, AMEX, or NYSE exchanges, and that’s one of the reasons why extravagant profits can be extracted from OTCBB stocks if you know what you’re doing. I will be the first to admit that trading 0.0001 (or somewhere in that price range) stocks is not for the squeamish, nor is it for people that have a hard time parting with their money, or seeing their money move up and down quite rapidly. All of these things I just mentioned are elements of trading stocks of that caliber, and they cannot be avoided. But if you know this going into it, you’ll be that much further along in developing the “nerves of steel” that it’s going to take in order to trade microcap stocks successfully.


Image courtesy of Microsoft Office Clip Art
Image courtesy of Microsoft Office Clip Art

0.0001 Stocks and Leverage

So what exactly is the “big draw” of 0.0001 stocks? The main thing that makes them attractive is the LEVERAGE that they offer. Just think about it: ONE UPTICK on a stock trading at 0.0001 means that you have just doubled your investment. No, I’m not kidding. Think about it: If the stock goes from 0.0001 to 0.0002, that’s a 100% increase! All you have to do is time your entry right to get into a stock at 0.0001, and then hope that the market has enough volatility and price activity to increase to 0.0002, and then pull out…you just made 100% on your money. I will admit, however, that this is easier said than done, because there are quite a few factors at play when actually trading the OTCBB markets that may not be readily apparent, and what works in theory may not always come through when you’re in the real environment. One thing to consider is how liquid the market is of the particular stock that you’re researching. Sometimes it’s hard as heck to get filled on limit orders with OTCBB stocks—shoot, it’s hard to get filled with straight-up market orders sometimes. Anytime you have difficulty getting filled, especially if your order is set at the prevailing market price (or not too far from it), that’s a good indication that the stock you’re trading is slightly illiquid. This will make it a lot harder (and take a lot longer) than a stock with hundreds of millions of shares being traded daily (i.e., strong average daily volume). Another thing to consider is that you really don’t know whether or not the stock is on the verge of going “kaput”, so to speak. I hate to sound like a pessimist, but this is just the reality of the situation. One of the reasons why OTCBB stocks are considered high-risk is because everyone knows that the companies backing the stocks are not always exactly…er…legitimate, or have their legs under them yet. So, you better go ahead and accept the fact that the very 0.0001 stock you’re excited about could very well go belly-up at any minute…this is simply the cost of doing business, folks. That’s why they call the money that you invest with “risk capital”, not “mortgage money”, “power bill money”, or anything else like that—it’s money that you should ONLY be using for investing in the stock market, and it’s money that you could lose without drastically changing your financial picture. Never forget that.

As far as a list of 0.0001 stocks, this hub doesn’t even have the room to contain such a list. My best recommendation if you’re looking for specific stocks is to do a quick Google search for “otcbb stock screener”, or some type of similar stock screener that can filter by price. Simply filter your results based on price, and set that price for 0.0001. You’ll quickly see that there are a ton of potential stocks to choose from. Another way to go about it is to go the OTCBB website and look at the “Most Active”, “Biggest Gainers”, “Biggest Losers”, etc., and you’ll get a good feel for the truly vast number of stocks that you can research. All that’s left is the research…go forth and find those 0.0001 stocks!

Comments 19 comments

scheng1 6 years ago

There is a risk of bankruptcy for buying 0.0001 stocks. After all, the companies with such low share value must have finanical problems.


SteadyHubs profile image

SteadyHubs 6 years ago from Georgia, USA Author

Yeah, it can definitely happen. I've actually had it happen before...one of the stocks I bought at 0.0001 went to the crapper, and it became "non-marketable". Oh, well...that's why I constantly emphasize that people should never risk more than they're comfortable with losing when they speculate on these "sub-penny stocks".


Gabe 6 years ago

Seems like if you had 1000$, you could divide the money up among 20 of the highest volume 0.0001 stocks so that you have about 45$ in each after commission. Some will go bankrupt, but the highest volume 0.0001 stocks have usually been around for 2+ years and since this is short term trading odds are most of them won't disappear.

Then, when there is one of those huge upswings, which will be often if your watching 20 0.0001 stocks at once, you sell it off. The upswing is likely to bring that particular stock to 0.0005 at minimum, if not 0.0015 or more.

So even if 10 out of 20 of your stocks go bankrupt, the ones you sell at 0.0005+ still get you an overall profit. And it shouldn't be hard to sell because when a 0.0001 stock experiences an upswing the volume increases exponentially as well.

Sounds too good to be true though.


SteadyHubs profile image

SteadyHubs 6 years ago from Georgia, USA Author

I like the idea though, Gabe...you spread out the risk this way and don't keep all your eggs in one basket.


Robert 6 years ago

Ibought a 1000000 shares of stock @ .0001 about a month ago and put a sell limit price of .0002 on it, and almost 30 days later the stok has risen 8 times or more to .0002 and still do not have a fill-- is their another way to do this

nd get fills?


Mapstocks 6 years ago

try selling at .00019


PennyTrader 5 years ago

Check out stocklur .com for trading penny stocks. They have an awesome news section that allows you to sort for stocks in the news.


OTC trader 5 years ago

Just a comment Re: "f the stock goes from 0.0001 to 0.0002, that’s a 100% increase!"

Yes the stock is doubled but technically you can not sell yet at 0.0002 as above. The stock still have an ask of 0.0001. The market makers will not buy it at 0.0002. You have to wait for 0.0002 to become the bid which usually comes at 0.0003 ask and 0.0002 bid respectively.


Pennystocktrader 5 years ago

BZCN

What do you think about this stock pick?


SteadyHubs profile image

SteadyHubs 5 years ago from Georgia, USA Author

@Robert: Most of the time the stock will have to trade through the price of 0.0002 just to get a fill at 0.0002. In other words, you probably won't get filled at 0.0002 until the price hits 0.0003.

@Mapstocks: Not sure that's gonna work bro. Possible, but not likely.

@PennyTrader: Gotcha--thx

@ OTC Trader: Good illustration--same as what I was telling Robert above, but you did a much better job.

@ Pennystocktrader: It's definitely an 0.0001 stock. The price performance will have to do as we have talked about above to really double your money and get out. Volume looks decent, though--not too thin.

@


fulcherben profile image

fulcherben 5 years ago from Milledgeville, Georgia

This is speculating, which is fine and has a place in everyone's portfolio. However when investing it places your capital at less risk. When investing in penny/sub-penny it should be constrained to 10% of your portfolio.


SteadyHubs profile image

SteadyHubs 5 years ago from Georgia, USA Author

@ fulcherben: In these current economic times, I would actually say that 10% is too generous--I would reduce to no more than 5%-7% of overall portfolio. Wealth preservation during these times of uncertainty is more important in my mind than speculative ventures.


Dennis Allen 4 years ago

Robert from 20 months ago could not sell his .0001 stock when they went up to .0002.

Mapstocks answered his question of why he could not sell these stock by suggesting he sell at.00019.

I thought you could not sell these stocks between tics.

Dennis


SteadyHubs profile image

SteadyHubs 4 years ago from Georgia, USA Author

@ Dennis: Actually, the price difference between 0.00019 and 0.0002 is a tick. With these sub-penny stocks (or nano-cap stocks as they're often called), the major price change happens at the 4th number after the decimal, but the ticks are actually on the 5th number after the decimal. In other words, you can have a price of 0.00011, 0.00012, 0.00013, 0.00014, etc. all the way up to 0.0002. Each change in that 5th number is a tick. The key is, getting a limit order filled to sell for that specific price at that specific tick is not as easy as it seems. Plus, as in your example, if he sells at 0.00019, scaled out it makes quite a bit of difference in bottom-line profit when you're buying millions of shares of these stocks at a time. As far as market orders go, hang it up--the slippage will murder you.


Jai Catalano 4 years ago

What if a stock is .0001 and you notice that for the last ten days 800 million shares have been bought over the course of 10 days? That seems odd no?


SteadyHubs profile image

SteadyHubs 3 years ago from Georgia, USA Author

@ Jai: In the stock market, especially the OTC/microcap market, I don't put ANYTHING past the manipulators and shady stock operators.


Brian 2 years ago

Wow guys, thank you for the tips

there certainly is a lot of money to be made out there.

-Brian


MisterB 2 years ago

I like http://www.dailystockdata.com because they can send stock data for over 35 countries in different data formats. I also like their Free Market Software tab (it's really free) and their Weekly Newsletter tab where they list for free the top five or ten stocks in specific groups ... depending on what you're looking for ... it's a great resource.


JTrades 17 months ago

I agree with your statements on leveraging money for sub penny stocks and triple zero stocks. I'm making a good amount of money trading these and several that I've just started looking at are already beginning to see some mentions online. http://bit.ly/1QjoPBa

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