Any broker can sell you penny stocks. The people who make the big bucks are not brokers. They are 'market makers', 'promoters', and often, scam artists. They will acquire a very large position in tiny 'over the counter' stocks and then promote the hell out of them. They are not selling the buyer the stock owned by other traders who are selling, the way the market generally operates. They are selling YOU some of what THEY own - for a large profit. Once they've reached what they think is the limit, they dump what they have left for wharever they can get. This tactic is called 'pump and dump'. There is no real market for the stock, and it crashes. Whatever market there was was created by them, for their benefit.
This gives all penny stocks a bad name. There are legit stocks and legit brokers.
There are very few individual penny stock brokers, invdividual that consider themselves brokers who deal in penny stocks are not considered to be very reputable and are not really ones that a repurable firm would hire
There is no such thing as penny stock brokerage firm since penny stocks are not highly regarded in the investment world and are frowned upon by regulators
Do they make a lot of money - no since their income is controlled by the Mark-up and/or Mark down ruls of the regulators which lmit the percentage of profit they can make on a given trade.
Thise that do make money are the promoters, who solicit companies to promote their shares by creating pump & dump prcedures - for this action they are usually paid in company shares and if they can drive the price of the stock higher, they make money but most of the customers do not
From a brokerage firm’s perspective having their customer deal in penny stocks is a loosing proposition. Many firms do what ever they can to discourage such investments/trading, especially from new accounts. No firm wants to be known as a “penny stock” firm, this would not be a honor but an absolute disgrace
"dividend" is the wrong word. commission, bonus, spiff, salary or something, but not dividend.
In answer to your question: It is the 90/10 rule. 90% of the money is made by 10% of the brokers.
It is difficult because after a few weeks or months the salesman realizes that success and "misrepresentation" go hand in hand.
A person with a conscience quits because they realize their customers, for the most part, lose money.
I would rather sell lottery tickets rather than penny stocks.
Yes, but none of them are easy. eg
*Perhaps the most popular way to profit from a smallcap is to buy it cheap, convince other people that it's worth far more than you paid for it, then sell it at the inflated price. Unfortunately, this is hugely unethical and quite possibly illegal where you live. It's also difficult to make work.You've probably received spam email telling you about this great hot tip about a really cheap penny stock to buy. The message promises you the moon. The price is about to explode! You'd better buy it now to lock in your profit! Step back and think about that for a second.
If the stock is really going to go up in value soon, it'll do so for a reason. Perhaps the underlying business has improved. Perhaps the company's about to be acquired. Perhaps there's going to be a huge order that only that company can fill. If that's the case (and if your anonymous correspondent knows why the price is about to go up), ask yourself two questions. First, why is that person encouraging you to buy now (thus driving up the price, because prices go up when there are more buyers than sellers) instead of buying more him or her self? Second, how does that person know the price will go up?
What's more likely is that your anonymous friend bought shares at 25 cents and wants to get a lot of people to buy shares at 50 cents and is trying to pump up excitement for the stock to attract more buyers. Nothing about the business has changed; it's still worth 25 cents per share. This appears to be how something like 900 Percent Stocks works. They're not interested in helping you. They don't want to teach you how to invest in penny stocks and make money. 900PercentStock may just be a scam, with its clients more interested in finding suckers to make money from than than in helping you make money.
All the major brokerage houses such as Scottrade and Ameritrade trade stocks of all kinds including penny stocks. The trades are electronic and one type of stock is no more difficult than another. If there are no shares available to trade then the trade request just waits.
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Is there such a thing as a "penny stock broker"? Or are you referring to Timothy Sykes? Maybe "promoter" would be a better term.
Probably more than the suckers who buy penny stocks.
like is the dividend very high for them as a reward for how difficult they are to sell?
