Many people that want to make money, invest in the stock market in the hope of making a killing but, not everyone can unfortunately afford to invest in the large stock markets like the NASDAQ or the NYSE but for them, there is another choice. That other choice is to invest in penny stocks as those too have been known to make people millionaires. It must be said though that very few of the penny stock investors do actually become millionaires in fact, only 10% of them make any money at all with the other 90% losing their investments. Penny stocks though do work in the same way as other stocks and so the idea is to buy shares when they are cheap and then hold those shares until they increase in value and then sell them at a profit. The difference is that penny stocks are shares in small companies instead of shares in the blue chip companies on the NYSE or NASDAQ. Just like those bigger shares though, these small shares can fluctuate in value and so at least the potential is there to make a profit. You can find out more about penny stocks at this website http://www.moneysoldiers.com/how-to-buy-penny-stocks-the-basics/ but basically they are referred to by some people as a gamble rather than an investment and the reason they say that is because sometimes a penny investor may not know anything about the company they invest in. The reason for this is that the larger companies that trade their shares on the better known stock markets, are subject to rules laid down by the Securities and Exchange Commission (SEC) whilst the smaller companies are not. One of the regulations that the SEC maintain is that before any company can offer its shares on the stock markets, it must first provide potential investors with information on the company and so that is why investors in the smaller companies may not know anything about them. These smaller companies also want to raise capital just as the larger companies do and so they offer shares for sale but as their companies have a much lower overall value, their shares are relatively cheap compared to the larger companies and can often be bought for just pennies and that is why they are referred to as penny stocks. If a small company does well though and grows, its shares may rapidly raise in value and that is what the penny stock investor hopes for in order to make a profit. Although sometimes referred to as a gamble, investing in penny stocks can be profitable but most of the people that have found success in penny trading, have found success because they devised and stuck to a plan, one that worked. It would therefore be apparent that in order to successfully trade in penny stocks, you should first have a plan and then hope that that plan works but even if it doesn’t and you lose your money, you will have learned something about trading in the larger markets.