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Penny Stock Jargon

Stock Market Terminology Can Sometimes Seem Like a Foreign Language to New Investors

Penny Stock Jargon

      I have received tons of email lately especially after our recent big gainers. I apologize for not responding immediately but, I have been really busy scanning the market for a huge play next week.

 

A few of our newbie members were a little confused by some of the language used in my FREE Penny Stock Newsletter so I decided to right a brief article on popular penny stock jargon. I will go over a few terms and briefly explain what they mean that way everyone can understand what I’m talking about when I send out my big play next week.

Ok so here we go…

Momentum Play or Momo Play:  This is the act of buying or shorting a stock based on current or anticipated upward movement in its price.  Let’s see you hear that a certain company is about to make a huge announcement regarding  a major acquisition or release of a new product you might buy some shares anticipating the latest news will result in the price per share increasing. Successful day traders tend to practice this style as a way to earn profits in a short amount of time. Momo plays are more often based on trends than actual company fundamentals.

When I send out a hot stock alert and mention that it is a momentum play that means I have been studying the stocks movement for awhile and I feel its price per share will either continue to rise or begin to rise shortly. This benefits investors who get in early as they ride the momentum and get the most profits from their trade.

Support Levels: A lot of times in my FREE penny stock newsletter I will mention that a stock is trading at or near support levels. I mention this specifically because generally the support level of a stock is the price that stock has a hard time falling below. There is really no better time to pick up shares of a stock then when it’s trading near or at support level. This is the most popular entry point for traders as it increases the chance of a huge profit and reduces the chance of a huge loss.

Float: I will sometimes put emphasis on a stock with a “tight float” or “low float” The float is the amount of shares available for trading(Outstanding Shares-Restricted Shares) Stocks with a low float are much more volatile which could cause their price to jump after sudden news by the company or a breakthrough in their industry. These are attractive stocks for traders looking to make a fast profit on the possible momentum resulting from a sudden press release.

Sub penny Play: This is pretty self explanatory a sub penny stock is one that is trading for less than a penny.

Besides “sub penny play” all these terms relate to blue chip stocks as well. I just want to clarify for all our beginner investors some of the jargon I use so that they will have a better understanding in the future.

Below are some sites that I recommend for all new investors to look at before beginning any real investing.  As always perform your due diligence before investing in any stock and remember to sign up for our always FREE hot penny stock newsletter

http://www.investopedia.com/

http://www.howthemarketworks.com/

http://investorshub.advfn.com/





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