Of course, the SPY and QQQ – benchmark ETFs for larger markets – also followed suit their respective increases in price weren’t nearly as large as the IWM. The IWM made new all-time highs on Thursday. Ever further, major market benchmarks like the Russell 2000 Small-Cap ETF (IWM) justified this argument and the strength that small-caps have, in general.
Out of the top 10 most active listed stocks in the market yesterday, 8 were stocks under $5. See: Penny Stocks Dominate Top 10 Most Actives As Buying Frenzy Resumes
These are the ones most actively traded by both retail traders and funds daily. Yesterday we discussed the most active stocks on the NYSE and Nasdaq. Let’s set the OTC stocks aside for a moment. There is no question about it that small-cap, micro-cap, and nano-cap stocks are captivating traders. So for this article, we’ll focus on low-priced stocks but the ones trading at least $0.01 or greater. A small move of a fraction of a penny could mean huge wins or massive losses. This is one of the highest risk sets you could come across. 3 Penny Stocks To Watch As Biotech Surges In April 2021.5 Cheap Penny Stocks To Buy Under $5, Are They Worth It?.Penny Stocks To Watch As New Psychedelic ETF Launches This Week.In fact, if you’re wondering what the lowest priced penny stocks are, they are trading at $0.0001. But when you’re talking about OTC penny stocks, for instance, there are many that you’ll find trading below $0.10 and even below $0.01. So for a Nasdaq or NYSE stock to be trading for less than a dime, it’s infrequent. One of these limits is maintaining a minimum bid price. Since the application tends to cater mostly to listed penny stocks (those on the NYSE & Nasdaq), certain limits are set by the exchanges that companies need to adhere to. One reason you don’t find too many penny stocks on Robinhood under $0.10 is due to listing requirements. However, if you’ve got a 10 cent stock dipping by 2 cents, for example, your position just dropped 20%. Case in point, if Apple or Amazon drops 1 or 2 cents, it doesn’t move the needle at all. When you’re talking about penny stocks under 10 cents, the margin for error, so to speak, is slim.
The main reason behind that is small price changes equate to larger shifts in percentage. The cheaper the stock, the higher the risk in many cases. The question came up this week, “ Are penny stocks worth it?” and I’ll be the first to say it has everything to do with you as a trader.
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