What do you look for when identifying penny stocks to buy? Are you a technical trader looking for chart patterns? Is penny stock news the first thing you look for? There are plenty of strategies to use to make money in the stock market today. You’ve got your pick. While trading options might be a popular alternative to blue chips, there are many more risks that could work against you.
Not only do you have a greater level of volatility, but you’ve also got time decay to think about. I won’t get into a full explanation of what options are or how to trade them. But there is something to speak to when comparing penny stocks versus options.
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The closer to the expiration date you get with options, the more time decays away at the value of your option. What that means is the slightest fluctuation in an underlying stock’s price, the option can dramatically shift in value depending on how close you are to expiration. When it comes to penny stocks, there is no expiration date.
The main thing you need to focus on is your P&L. You still have the benefits of leveraging small sums of money to make larger percentage gains. Whether you’re learning how to trade options or penny stocks, it’s important to make sure you know both the risks and the potential rewards you’ll encounter.
When it comes to finding the best penny stocks to buy today, you should also think about this: what’s your goal? Are you looking to make a quick flip in a few hours or are you planning on swing trading penny stocks? There are different strategies to deploy in either case. So time horizon should also play a role in your game plan. With all of this in mind, are these names on your list of penny stocks to buy or avoid today?
Small Cap Reporter 