5 Risks and Scams of Investing in Penny Stocks

Penny stock trading poses risks that many people don’t even know about!

Continue reading to see some of the most common scams you might encounter when penny stock investing.

Risks of Investing in Penny Stocks

These penny stock scammers use false advertising to lure people into investing their hard-earned cash in these risky stocks – not knowing that there is no guarantee at all!

Penny Stock Scams

Pump and dump penny stock scams happen regularly. Penny stock promoters, or people who are responsible for selling the stock, will buy shares of penny stocks and inflate its price.

→ Pump and Dump

It works by shorting the stock on Robinhood or a Robinhood alternative (usually in a bull market) and then releasing false information to send the price plummeting.

→ Short and Distort

This scam will involve a company that is almost bankrupt and has very little earning potential. Certainly not one of the appreciating assets worth investing in.

→ Reverse Merger Deceptions

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