Wednesday, May 25, 2005

What are the risks of Penny-Stock Investments?

Risk of Being Overcharged
Brokerage firms selling penny stocks generally do not earn their profits through commissions. Instead, they make money by charging the investor an undisclosed "mark-up" above the price the firm has paid for the stock. Although excessive mark-ups are illegal, some firms nevertheless charge mark-ups of 100% or more.

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