Are you looking for penny stocks to buy? Are you grappling with the push and pull of skeptics saying penny stocks aren’t worth it or penny stocks are a scam? Day in and day out, there are countless cheap stocks that explode hundreds of percentage points that support the idea that penny stocks can be worth your time. That is, if you know what you’re doing.
Well, in the stock market today, another penny stock just went bananas and further gave reasons why traders are paying attention to the cheap names. Let’s go over some basics before we dive into VistaGen Therapeutics (NASDAQ: VTGN) and why VTGN stock is up today.
What Are Penny Stocks?
Penny stocks are shares of public companies with a share price of $5 or less. They are typically smaller companies in the early or development stages. However, over the last few years, there are plenty of examples of penny stocks to watch that are related to notable household names. When trading these cheap stocks, weighing risk and reward is key. It’s also important to know how to trade penny stocks in order to efficiently capitalize.
Why Do People Trade Penny Stocks?
- The Thrill of the Chase: Penny stocks are a bit like betting on the underdog. You might find a little-known company that turns into the next big thing. If that happens, the payoff can be huge.
- You Don’t Need a Fortune to Start: You can dip your toes into the investment waters with just a few bucks. It feels less intimidating than buying shares of large, well-known companies.
- The Excitement Factor: Let’s be honest; there’s something thrilling about investing in something that could skyrocket overnight. It’s a bit of a treasure hunt, and some people love the thrill of the hunt.
But Wait, What Are the Risks?
Here’s where things get tricky:
- A Wild Ride: Penny stocks can be as volatile as a roller coaster. Today’s hot stock could be tomorrow’s dud.
- Shadowy Corners: Lack of regulation means there might be less information about the company’s financial health. You might be flying blind.
- Getting Stuck: Sometimes, it’s hard to sell these stocks. If everyone’s selling and no one’s buying, you could get stuck with a losing stock.
- Watch Out for Scams: Sadly, the penny stock world can be a breeding ground for scams. Someone might manipulate the price, leaving you holding the bag.
So How Do You Find Penny Stocks to Buy?
If you’re still curious and want to explore further, here are some steps to take:
- Do Your Homework: Research is key. Use reputable sources to find potential stocks, and dig deep into the company’s financials.
- Keep Your Ear to the Ground: Stay on top of industry news. If you follow the trends, you might spot opportunities.
- Get Professional Advice: If you’re new to this, talk to a financial advisor. They can guide you through this complex landscape.
- Don’t Put All Your Eggs in One Basket: Diversification is your friend. Don’t invest all your money in one stock.
Why VTGN Stock Is Up Today
Penny stocks are like the wild west of investing. They offer excitement, potential for big gains, and the kind of adventure that some traders crave. But they’re not for the faint of heart. There’s a reason they say, “High risk, high reward.”
This is where VistaGen Therapeutics comes into play. Shares of the penny stock were trading at $1.68 as of the closing bell on Friday. That all changed during Monday’s premarket session when VTGN stock exploded to highs of $60.
VTGN Stock Catalyst
That 3,471% move was triggered by news of positive Phase 3 data. The company announced positive top-line results from its Phase 3 PALISADE-2 trial of PH94B or fasedienol. This is a nasal spray use to trade social anxiety disorder.
“Fasedienol demonstrated a rapid and very clinically meaningful reduction in SUDS score, indicating a single administration has the potential to reduce anxiety symptoms during an anxiety-provoking situation,” stated Dr. Michael R. Liebowitz, innovator of the Liebowitz Social Anxiety Scale (LSAS), former Columbia University psychiatrist, director and founder of the Anxiety Disorders Clinic at the New York State Psychiatric Institute, and current Managing Director of The Medical Research Network LLC in New York City.
He further stated, “A future Phase 3 study involving multiple administrations of fasedienol over several weeks on a patient-tailored, as-needed basis will build on the body of evidence now demonstrated in PALISADE-2 and multiple Phase 2 studies. Fasedienol could be an optimal treatment for social anxiety patients given its ability to be used acutely to reduce anxiety while helping to reduce SAD severity over time.”
VTGN & Low Float Penny Stocks
Although VTGN experienced somewhat of a short squeeze, the actual short interest on the penny stocks wasn’t as high as some may think. According to data from TDAmeritrade, the short float percentage sits around 6%. But it’s the float that has played another role.
As the basic rules of supply and demand suggest, higher demand and lower supply equates to higher prices. In this case, the public float, or the available number of shares able to be traded by the public, sits below 10 million. As a general rule of thumb, anything under 15 million can be considered “low” float.