When I first heard about Penny Stocks, I didn’t know penny stock picking services existed. The SEC defines Penny Stocks as low-priced stocks, usually under $5. You can buy and sell penny stocks „over the counter“ (OTC), from a fraction of a penny to five U.S. dollars ($0.001-$5.00). For most penny stock investors, however, the biggest problem is how to find profitable stocks under $5. You can do your own research, but most savvy stock investors subscribe to penny stock picking services for a monthly fee.

There are, of course, free penny stock picking services you can use, but as a sage once said, there is no free lunch in America. There are many good penny stock picking services out there, but the Penny Stock Egghead membership stands out as a one-time fee for life. As a member, they will put your email on their emailing list, and you will receive a weekly penny stock alert every Friday and a follow up on Sunday. Investing in stocks is a rat-race to wealth; and you need to have a good and reputable penny picking service on your side to win. Unfortunately, „pump and dump“ penny stock promoters and other bad actors have tarnished the penny stock industry.

For Penny Stock investing beginners, the internet offers both challenges and rewards. The challenges consist of, among other things, the information overload you have to sift through to pick the „golden nuggets“ of penny stocks. After you have learned how to navigate the internet landscape, you will soon start to realize that there are opportunities to make more money with penny stock trading. But, you need to learn to avoid becoming a victim of pump and dump penny stock purveyors. Pumping and dumping in penny stock investing refers to penny stock newsletter scams and other schemes that target investors with little or no information on how to find the best stocks. They lure them into signing up for worthless penny stocks.

In your quest to find the best stock picking services, here are the tips to help you:

Promoters of penny stock service who assert information that is patently untrue for the purpose of enticing you to subscribe to their pump and dump penny stocks

Stock picking services offering information they claim is „insider“ news for picking micro cap stocks

Free penny stock newsletters with unproven recommendation of stocks they deem to be the best stock, when in fact they are promoting their own stocks.

Messages in chat rooms or stock message boards with a sense of urgency that you buy this or that stock now.

Schemes by penny stock promoters which involve pumping and dumping penny stocks can leave you holding the proverbial empty bag of worthless penny stocks. By design, a promoter often sells or downloads (dumps) their shares immediately after pumping up and selling unsuspecting investors on the benefits of certain penny stocks, but before purchasers of that stock realize what is going on. Since the promoters are no longer pushing for the stocks involved, the price consequently drops down to levels that make your stocks worthless.

The good news is that Uncle Sam is always on the look for the bad actors who have tarnished the penny stock industry. As the Washington Post recently reported, the SEC is working twice as hard to investigate any stock dealer or promoter accused of manipulating „micro-cap“ stocks. By announcing that SEC plans to open about half a dozen investigation every month, the Feds are putting promoters of pump and dump penny stocks on notice. The SEC is aiming its attention on promoters who target small investors who often do not have access to readily available information on a given stock company. Unlike blue chip stock companies who regularly file periodic reports required by the SEC, some micro-cap companies are not often in compliance. The result is that investors have no readily available information on penny stock companies to help them in their investment decisions.

It is generally difficult to find information on penny stock companies when such companies are not filing periodic reports. It is equally difficult to know why certain companies are registered but their stocks are traded OTC instead on the stock exchange. However, by reviewing the listing requirement of stock exchanges such as the NYSE, you start to realize that some of the penny stock companies ended up where they are because they no longer qualify to be listed. A listed stock company has to meet both the SEC periodic reports filing requirement as well as other requirements by the NYSE. If a company fails to meet financial and other requirements such as a company’s market capitalization, it will be struck from the listing. Soon or later a company stock that is no longer listed, will end up on the penny stock block where information is hard to come by. It is the more reason you should be careful when dealing with penny stock promoters who claim to have insider information just to pump and dump their stocks.

The reference to micro-cap is not meant to confuse you. OTC penny stocks and Micro-cap stocks mean the same thing. Micro-cap is a term that refers to stock companies that are registered with SEC but whose stock is not listed on a major stock exchange such as the New York Stock Exchange (NYSE). Also, micro-cap stock companies include stock companies who are registered but never got listed on a stock at exchange at inception because of their size. These type of stock companies are said to be „thinly traded“ because there are fewer buyers and sellers for the stock. With exception, of course, it is generally difficult to find information on micro-cap stocks, so most institutional investors avoid investing in penny stocks. In addition, because of low volumes, institutional investors are afraid of being duped by pump and dump penny stock promoters and who may manipulate stock prices. Thus, institutional investors prefer to deal in blue-chip stock companies whose periodic reports they can find and peruse to make informed investment decisions.

In conclusion, blue chip stock companies are companies whose stock you can buy on the stock exchange. Blue chip stock are different from penny stocks in many ways. Among other things, institutional investors prefer investing in blue chip stocks because they can easily find and analyze information contained in the periodic reports filed with SEC. They usually avoid investing in penny stock for lack of information. There are some companies listed on the stock exchange with the stocks trading at less than $5; however, the bulk of stocks under 5 (a term that refers to penny stocks) can be bought or sold over-the-counter (OTC). OTC just means that the transactions take place outside of the stock exchange. If you are looking to invest in penny stock, your best bet is to have a strategy such as joining the Penny Stock Egghead to help you pick profitable penny stocks.

Learn more about penny stock picking services by visiting at http://getmoneyapps.com/penny-stocks

The internet is evolving, and you need to keep abreast with the changes. Making money with penny stocks can be rewarding if you know how to pick the best penny stocks to buy. Most penny stocks are worthless, but you can find the best stocks under 5 by learning how to look for undervalued penny stocks. The key to making money online is learning and discovering new ways, tools and strategies to keep abreast with the ever changing economy. You can reallyMake more money with penny stock egghead by referring to our website right now. Get the latest advice directly from this useful source of information at http://getmoneyapps.com/stock-picks.