There are two reasons why new investors find penny stock trading very appealing. The first reason is because it is affordable. The price range is between one to three dollars and not exceeding five dollars. This is defined by the Securities and Exchange Commission or the SEC. In actual practice, shares can even go lower than a dollar each. The second magnet for new investors is its high potential for fast profit at a short period of time.

Penny stock trading is a great way for new traders to get involved in the stock market. Many penny stocks are very cheap and sell for pennies on the dollar. One problem with stock trading is that it can be extremely risky for beginner traders.