It’s true that penny stocks can make you a lot of money. But to do so, you need to know a few ground rules. For starters, be ready to take on risk and make sure that if you are taking a risk, you’re only risking what you can afford to lose. Next, make sure you’re looking at penny stocks to buy that have strong fundamentals.
Sure, the short term breakouts are great but unless you can stay glued to your computer all day, you’ll likely want to put together a list of penny stocks that have longer-term potential. Fundamentals are a good way to gauge that. Finally, when it comes to money making penny stocks, be sure to look into the market itself. An illiquid, lightly traded stock can be a bigger headache than something that is liquid. It may be easy to buy a penny stock like this but when it comes time to sell, you could run into problems.
Can I Make Money With Penny Stocks?
Now that you’ve got some of the penny stock basics, let’s get to the point: You can make a lot of money with penny stocks. Take a company like Zynerba (ZYNE Stock Chart) for example. If you look at the company today, you’ll say, “This isn’t a penny stock at all.” Shares of ZYNE stock trade at more than $13 per share and have been moving higher since the beginning of the year.
But as of January 2, ZYNE shareholders were looking at a penny stock. It’s true, this stock was trading at just $2.98 to open the new year. As we’ve discussed in the past, biotech penny stocks can be incredibly volatile. They can also offer up big gains. With the case of Zynerba, early buyers have seen a run-up of as much as 347% after its May 7 highs of $13.33!
That means for every $1,000 invested on January 2, the total value would now be in the ballpark of nearly $3,500! Now, maybe for some of you reading this, $3,500 may not seem like a lot of money. But then again, it’s all based on perspective. Let’s say you bought $10,000 worth of ZYNE stock back in January. Today’s gross value is nearly $35,000. That’s more than some people make in an entire year & just one penny stock could have done that in as little as a few months!
What Kind Of Company Is Zynerba?
As I said above, Zynerba is a biotech stock. The company focuses on developing transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders. What’s helped spark things lately is news of its Fast Track Designation for its Zygel™.
This treatment is used for behavioral symptoms associated with Fragile X Syndrome (FXS). According to corporate press, “FDA’s Fast Track program is designed to facilitate the development of drugs intended to treat serious conditions and fill unmet medical needs, and can lead to expedited review by FDA in order to get new important drugs to the patient earlier.”
Now, you be the judge. Can you make a lot of money with penny stocks?