I know next to nothing about stocks, trading, investing, etc...

Tag cuz I have been wondering the same thing.

Take your money and wipe your ass with it and you will get more use out of it than you will from the penny stocks.

They are stocks that sell for pennies a piece

http://en.wikipedia.org/wiki/Penny_stock


I'm thinking lottery tickets are a better investment.

Ah, yes because in the OP I clearly stated that my primary goal was to amass large amounts of money.

 

It does seem like this would be their main purpose. Just a vehicle for grey or even flat out illegal pump and dump schemes.

I assume you're thinking about what is called "day trading".
There are rules that address day trading.  First,  if you execute more than three trades per week, you are a "pattern day trader"



and must comply with certain special rules.  Chief of which is that you must maintain a balance of at least 25,000 dollars in



a margin account.
Read this for more info on day trading:
http://www.sec.gov/investor/alerts/daytrading.pdf
Playing with low cost stocks (Note, I'm referring mostly to GOOD stocks that are low cost per share, while not

really being "penny stocks")  IS fun and you can do it with small amounts of money.  But,  every trade has a cost



associated with it and it can be difficult to make it worth your while if dealing in matters of merely a few hundred



dollars at a time.
They're fun to play with but actually making money on them is not as easy as you might think.



Sometimes, yes.  Do you think I don't regret NOT buying Ford when it was 2 bucks a share in 2008?
You can set up an online trading  account for a few hundred bucks and try your luck.
But there are pitfalls to be aware of.
The first one is to understand "settled funds".
Settled funds are what you have after you have sold a security and three days have elapsed since the sale.
Three days MUST elapse since you made the sale for the funds to be settled.  
When you sell the security,  the funds are "unsettled" until three days later.
You can NOT use unsettled funds to purchase another security.
If you do,  you violate a trading rule (Rule T+3) and can't trade on margin with that account for 45 days.



It's cash only until then.
In practice, the settled funds rule means that if you intend to trade 1000 dollars a day, you need about 3000 dollars in



your account if you don't want to end up taking a day off without trading because you don't have any unsettled funds to



trade with.   Again, you can't use unsettled funds to purchase securities with.
Practical application:   You get a hot tip and buy a stock that skyrockets.   Then the price stabilizes.   It's worth 3000 dollars



but the price is very steady.   All your investment money (for this account) is tied up in this one stock.
On Monday, you sell a third of it and get 1000 dollars.  You now have 1000 dollars in unsettled funds that can't be used to buy more stocks yet.



On Tuesday, you sell another chunk of your stock and get another 1000 dollars.   You now have 2000 dollars in unsettled funds.



On Wednesday, you sell the last of it and get another 1000 dollars.  You now have 3000 dollars but it's all unsettled funds.



On Thursday,  the first 1000 dollars you made is now settled.  You may use up to but not beyond that 1000 dollars to buy stocks, if you wish.



On Friday,  the second  1000 dollars you made is now settled.  You may use it to buy stocks.  If you didn't buy anything yesterday, you can



buy up to 2000 dollars in stocks without violating the settled funds rule.



On Monday,  the next trading day,  all your sales from last week are settled and you may use all your 3000 dollars any way you please.
If on Thursday or Friday you had spent more than your settled funds amount, you would be in violation of Rule T+3 and then you are



placed on 45 days restriction for that account.  During this period of restriction you can't trade on margin.   Cash only.
The serious day trader (or even a person who likes to make a few trades a week but doesn't qualify as a pattern day trader) needs



one thing above all else:  INFORMATION.    NEWS FEEDS.  
He must learn how to screen stocks and figure out his own rules for likely candidates for short term investment.



He must learn to use the trading software packages available to him.
In my case, I did trade for a while with a few hundred bucks to start, and frankly I just didn't have enough money in the game



to overcome the fees associated even though I did make some good picks.  If i'd gone back in with 5K instead of 500 bucks



I would have undoubtely made a modest profit,  but I was unable to turn my 500 bucks into much more than 500 bucks



so I stuck to my own rules for that test and discontinued the experiment at a set time, satisfied that I understood the rules



and the basics of trading,  and knowing I could come back and try again later.
My personal rules for picking a stock to buy:  Average daily trade volume greater than 1 million shares traded per day.



Average daily volatility of 1/2 point per day.   No derogatory news.  
The best tool available to an online trader is the real-time stock tracking software that comes with the account.   The "quotes delayed



15 minutes" rule doesn't apply to active online trading and that makes ALL the difference.
CJ






 

I've made decent money with MJNA and HEMP

YMMV

Research biomedical stocks.  Lots of fun stuff going on there and plenty in the sub $1 range.  Some have doubled in value, others, not so much.  For example I had this one ridiculous reverse split not that long ago and it's almost back as low as it was before the reverse split *cough* CVM *cough*  

If you go this route, as a byproduct you will learn a lot about the FDA approvals, clinical trials, etc.  Like anything else in stocks, don't invest any more than you are willing to lose.

Penny stock market is dead. SEC is cracking down on it. There will be no more OTC stocks in the near future. 99% of the companies are scams.

They cost pennies for a reason.

I would not bother.  Pump and dump is the game.  If you are the sucker.... shame.

 For fun you could throw a few hundred or thousands at it if you can lose that amount and not feel bad.

They suck.

If you want to have fun with low priced stocks, try researching Biopharmaceutical companies, or hit the Yahoo message board
and follow some folks that seem to do well. I play the Bio's daily, and have had a good year, but don't invest money that your not
willing to loose. They are very volatile, as you are usually counting FDA drug approval. If you hit one it could go from $3 to $8 in a day.
If it doesn't get approved, it can drop to $.50. You'll learn a lot about medicine if you have the time to research.

Lol

 

Save your money and invest in some blue chips

You lose a few pennies here, a few pennies there.  After a while it adds up to real money.





Not something to mess with IMO, unless you have specific knowledge about the business and its prospects.






A-freaking-men.

If you find a penny stock that has a net profit I would love to see it.  I have bought and sold my fair share with little to no results.  

I now trade in profitable established companies.

Didn't ford stock drop down to 76 cents at one point.  I remember during the crash, family wanted to buy some stock but our ag edwards guy could't do anything because they were a penny stock.  None of us knew how to buy them.

If you are good at timing the pump and dump you might do well.  Most can't, which is why their are so many bastard children.

If you want to get started in taking control of your financial future, subscribe to this magazine: http://kiplinger.com/fronts/archive/magazine/index.html?si=1

It's the best $12/year you'll ever spend. It also covers much more than just stocks, bonds, and money markets.

I don't think that the Ford stock delisted when it fell.  When did it get to $.76?

In Nov. of 2008, it dropped to $1.01. That's the lowest.

Looks like it's lowest close was $1.26 on 11/19/2008.  Easy to purchase w/any online broker.

Whether you want to admit it or not legalized medical  marijuana will be legal in all states in the future. I don't smoke dope, but I'm not opposed to other people who wanna smoke it, smoking it. Indians weren't smoking tobacco in their peace pipes.

forget penny stocks. pick a pharmaceutical company who is growing, and pray they take off. do some research and play the numbers, you could come out ahead.
for high risk investing, i prefer currency speculation.
nothing like loosing 30% of your equity between thursday morning and tuesday afternoon.
the opposite is true as well though.

I've seen penny stocks used to refer to stock with a share price as high as $5

And no, you won't be able to play around with $20.  Why?  Commissions and fees.

Probably better off using one of the games/simulators available for free and learn a bit before putting cash in.