For many investors, good stocks to invest in are penny stocks.  What are penny stocks?  Also known as nano stock or microcap stock, penny stocks are the aggregate value of businesses outstanding common shares or the market capitalization instead of the stock price.

Broker for Penny Stocks

To figure a company’s market capitalization, you multiply the company’s stock price by the amount of outstanding shares.  This will give you the total dollar value for all of the shares the company has at any given time.  When searching for good stocks to invest in right now, you should keep in mind that penny stocks are traded as an over the counter market as opposed to the traditional stock exchange.  Typically an agent or broker will trade on the investor’s behalf, make the arrangements for the trade between an investor and a third party and the broker will then receive a commission for the facilitation of the trade.

Asking Price & Bid Price

As far as the transaction of good stocks to invest in 2010, penny stocks were highly recommended.  During penny transactions, brokers charge a large portion as principle transactions.  The broker is not paid a commission but instead makes a profit on the spread.  The highest dividend paying stocks 2010 typically had a large price, but with penny stocks there are no specific prices for which they are sold and/or bought.  The variation between the asking price and a bid price for a stock is known as the spread.  The typical spread for penny stocks is typically about 25% but, can go as high as 50-100%.

Inside & Outside Bid

Other terms associated with penny stocks include the inside and outside bid which is two bids and two ask prices.  It is important to keep in mind that the outside bid and ask are the ones with the most interest.  What are good stocks to invest in is a good question; however, it does not always apply when considering an investment in penny stocks.  The optimum way of finding good stocks to invest in is by consulting with a broker.  Keep in mind that when searching for a broker regarding penny stocks to only go with someone who is concerned over your best interest.