Penny stock alerts have the potential to be worth much more than pennies. While many investors follow traditional stock alerts, they miss golden financial opportunities by skipping penny stock alerts. There are major differences between penny stocks and traditional stocks. These variables make penny stocks intriguing and potentially lucrative.

The first major difference between penny stocks and traditional stocks is where investors find stock alerts. The U.S. Securities and Exchange Commission issues alerts about the progress of traditional stocks such as Apple and Ford Motors. It can be expensive to purchase top stocks, which typically yield a return of about 10 to 20 percent. A penny stock costs less because it is a security in a small or new company that might be unknown. Penny stock traders usually refer to pink sheets for updates rather than traditional stock alerts. Penny stock investors have to do a bit of research to find the best investments.

Because penny stocks are usually more sensitive than traditional stocks, small investors have the ability to earn big returns. Unlike traditional stocks, trading penny stocks is influenced by market demand. Because of this, penny stocks are not necessarily as predictable because they do not have be in accordance with stock exchange reporting rules. Investors who can ride the erratic statements and handle the risk can generate significant returns from penny stocks. Penny stocks are more volatile than secure traditional stocks which also means they can yield higher returns.

Unlike traditional stocks, investors following penny stock alerts can see gains in just hours, days or weeks. Larger companies move more slowly, which means it often takes longer for their share prices to advance. Following traditional stock alerts means returns might not be realized for months or years. Since many penny stocks do not have a revenue stream or inventories, it can be almost impossible to determine what a share should trade at. Investors must be savvy and closely follow penny stock alerts. While penny stocks are riskier, they also give investors a golden opportunity to yield impressive returns for a minimal investment.