It's very difficult if not impossible to pick the worst penny stocks since you have so many to choose from. For any instructor to give this type of project to their students is a strong indication that the person has no real securities experience nor do they understand the markets.
When you invest/trade in penny stock you should never put up more than you can afford to loose and you should assume you will loose it all. Unlike regular securities, penny stocks do not let you use risk cutting procedures (options and/or stop orders) since most are not traded in a regulated market place. Since there no requirement on market makers in the OTC Market it may be difficult to find a buyer when selling is required.
They say when you buy securities you have a 50%-50% chance of making money, when you buy penny stocks you have a 50-50-90% chance, 50-50 chance of making money and a 90% chance of loosing money. Since there are no meaningful regulations for trading only those with trading experience stand a chance of being successful trading in penny stocks. Penny stocks are not for newbies.
When buying penny stocks, like any other security investment, you never invest 100% of you investing capital. Penny stocks are fun to trade, but you should never count on them to be considered part of your primary investment objectives. One should not trade penny stock unless they have several years experience trading regular securities.
And before you enter an order for penny stock, read what the SEC has published regarding penny stocks http://www.sec.gov/investor/pubs/microca...
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.
Order routing and entry is annoying since there are no regulated markets nor market makers to direct such orders. Clearing such orders is time consuming and expensive, very few penny stocks go through a CNS system which leads to many have to be manually cleared and many delivers have denominational problems.
The storage of the certificates is extremely expensive since manual counts are required by law, secured space is required and re-registration of the certificates is time consuming and expensive.
Firms are more than willing to permit existing customers trade occasionally in penny stocks but very few firms want customers to trade in them frequently. Usually experienced customers will occasionally trade in a penny stock but they know what they doing. But new customers who want to trade in only penny stocks present problems for brokerage firms. Not only are the transactions problems but the customers lack of knowledge is very difficult to deal with.
Good luck with your class project, and with the instructor
Go to the OTC BB website and you will see stocks that you can get more than a thousand shares for a single dollar:
https://www.otcbb.com
REAC - Real Estate Contracts - Quote $0.0002 per share or
SFMI - Silver Falcon Mining - Quote $0.0006 per share
Now these two are the most actively traded stocks for the day - so you know there's people actively pushing these stocks. These are not even penny stocks - they are thousandsth of a penny stocks.
FNMA
it's some government thing. The details won't interest you.
For a project in class. Penny stocks that are falling drastically or overall terrible. And no "all of them" for answers
