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Are Penny Stocks Legal?

They don’t trade on the main stock exchanges. They have not been approved by the SEC, but nor have they been disapproved by the SEC. They are labeled as a high-risk investments. Very little is even known about them, and they’re often used in Internet e-mail spam scams. …Are penny stocks even legal to invest in?

Though they may sound scary and they may be unknown, even a little mysterious, there’s nothing illegal about investing in penny stocks. There’s a lot of information out there, a lot of it bad and much of even frightening, but investing in penny stocks doesn’t mean that you are breaking a law.

It means you’re taking a chance, but there’s nothing illegal about that, is there? Yes, penny stocks are considered high-risk investments, but for a relatively small price investors can buy shares and (one hopes) turn around to make a large profit. This is the draw of penny stocks, what makes them compelling.
Real Estate Investing Platform Also, when you buy penny stocks through a broker, you should get regular updates. Once a month, you’ll get information about your penny stocks and what their status is. This is something your broker has to do if you’ve invested in penny stocks, something that the broker is actually required to do. This lets investors track the progress of their stock.

The only trouble is, sometimes things happen very quickly in the world of penny stocks. These stock infrequently trade, and when they do trade they are not traded through the well-known and established stock exchanges. This makes is hard to both buy and sell penny stocks, so some investors are afraid of getting “stuck” with a stock that they can’t unload.

However, a stock’s risky nature doesn’t make it illegal, or even a bad investment. There are many things that are risky (like driving), but many people don’t let high risk stop them. In the world of stock investing, there is often risk involved. Perhaps penny stocks are considered riskier than some, but at the same time there is great potential to make a lot of money by investing in these penny stocks.

Penny stocks are low-priced, shared of companies that are generally on the small scale. These stocks are traded “over-the-counter” rather than on public exchanges, and this is why many investors know very little about penny stocks in general. To find more information about penny stocks, you can talk to your broker or do a little research in business journals and the like. There is information out there, and there are investment opportunities available. It’s just a matter of finding the rights ones for you.

If you’re considering an investment in penny stocks, it’s okay. Risky, yes. Mysterious, definitely. Potentially big? Sure. But illegal? No, not at all. At least right now, penny stocks are traded completely legally and under the guidelines of the SEC. Investing in these stocks can be a little exciting and a little dangerous, but you won’t wind up in jail.
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  1. Great information to know that even if penny stocks are not approved or highly recognized there's still nothing illegal about it. It just a high risk investment.

  2. Penny stocks can be a high-risk investment but I don't believe it is illegal. I wanted to know how much is the minimum amount to invest in penny stock as a first timer?

  3. Great stock education on penny stock legality. I think there's should be no fear about perny stocks since it isn't illegal.

  4. I never for once had any feeling that trading in penny stock is illegal..thanks for the information though.. the investing tips I get from this site has helped a lot

  5. Most people think penny stocks are illegal because of lack of information. They are as legal as anything!

  6. Penny stocks might be a high-risk investment but they are very much legal. A lot of people are profiting from it.

  7. A stock’s risky nature doesn’t make it illegal, or even a bad investment. A good stock education can always help improve profitability.

  8. Penny stocks are a high-risk investment but if done right the returns can be good. It just needs the right attitude and mindset.

  9. Penny stock returns can be good if one is invested well in their stock education. There is nothing illegal about them.

  10. There is nothing about Penny Stocks that are illegal. Although, some criminals target penny stocks due to their constant changing prices. Also, that it is easy to acquire a massive amount of shares.