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Originally Posted by pady999
On another note I've always wondered if you could buy a ton of penny stocks and when they go up a few cents just sell them? Like for instance say a penny stock is 2 cents and you buy $50 dollars worth which = 2500 shares and then it goes up to 10 cents the next day could you just sell it for $250 making $200? Something just makes me feel like that is just way to easy.
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Yeah, there's defintely a catch to doing what you describe. First, you say "when" they go up. There's a reason they're penny stocks. If they were worth more than that they would cost more (not always, but usually). Also, in the example where you just made $200 bucks in a day, you left out taxes (disregard if you're doing this in your IRA). Then you've got to consider the transaction costs. Depending on where your account is, you may have to pay between $7-50 bucks for the buy and again on the sell. Plus, your 2500 shares is a large (ish) quantity, so you may pay a surcharge on top of the normal comission.