Many people who are new to penny shares investment often wonder about the difference between penny stocks and shares. Well, in reality, there isn't a lot of difference between the two and both names refer to the same exact thing. As such, you shouldn't get confused when on person uses the term shares instead of stocks and vice versa. Both penny stocks and shares are usually traded for below five dollars and are also often made available by small companies that are quite new to the market itself. These trades are done OTC or over the counter through such quotation services as the OTC Bulletin Board and the Pink Sheets. Investing in these type of shares are also considered high risk by quite a number of people including industry experts because it is a well-known fact that with this type of trading, you can easily lose everything or gain a significant profit overnight. This same volatility is what lures in many risk seeking traders.

But why give penny shares investment a try? After all, it is a high risk deal and you could easily lose big if you do not have a proper understanding of what you're getting into. Despite this fact, trading penny stocks or shares has certainly increased in popularity over the recent years and has significantly changed the stock exchange marketplace. So how you can make a profit when it comes to trading these types of shares? Well, if you're aiming for the millions then this might be difficult to accomplish but the same goes for any type of market. Trading in penny stocks or shares, however, provides you with a benefit that you will not easily find in other trading instruments. This would be leverage. Through leverage, any person would be able to begin trading on the stock exchange with the majority of them becoming successful at it.

However, you should be well aware of the fact that this industry also has its fair share of illegitimate offers and scams. Because of this, you might want to make sure that the individuals or groups that you choose to do business with are legit. There is nothing wrong with doing a bit of background research as it is still the best way of protecting yourself from fraudulent people.

So there you have it, just a few of the things that every potential trader needs to know when it comes to penny shares investment. Remember, do not treat this type of shares trading as something that's temporary or fleeting because doing so could actually cost you