Siren call for risky options trader
Penny stocks and IPOs can be very tempting and perhaps in some cases can even be a good investment. However, the average investor does not have the time or the skill to properly research these types of investments. Instead, they trade through smaller, less structured exchanges. One reason shares may trade at such low prices is because the company itself either is not profitable or does not have a proven track record of financial stability.
Very solid companies with a strong financial history do not often need to trade over the counter. Instead, they will just be listed on the main exchange. One of the issues with researching companies dealt over the counter is that the listing requirements are often not nearly as stringent as they are on a larger exchange. The low price alone of penny stocks can lead to a number of situations where investors can get in trouble. With prices often at 50p or even less, one could purchase thousands of shares fairly easily with the hopes that the shares will rise quickly.
After all, if a stock only cost 10p, it would only need to rise 10p to double your investment! The problems can multiply at this point. Without proper research, the shares may be just as likely to drop 10p as they are to rise that amount. Another problem is the exit plan. Too many inexperienced investors fail to make a proper exit plan or fail to execute it. One aspect affecting this volatility is the liquidity, or lack thereof, when it comes to penny shares.
Because there are a limited number of investors trading these stocks at any given time, selling shares exactly when you want to may be difficult. In order to sell at a given price, you must find someone else willing to buy at that price.
Failure to find a buyer may result in the price being forced down, therefore immediately decreasing your profit if you were in a profitable position. Likewise, if you are selling because the shares are dropping in price, there is a risk of a price collapse if buyers are not willing to pay the price you desire. The prices of these types of investments are sometimes driven by one investor with a large holding.
Regulating bodies have tried to crack down on pump and dump schemes, but unfortunately it still happens. In this situation, the one orchestrating the scheme will artificially inflate the price of the stock, in which they already hold a significant position, by either paid recommendations or endorsements or by providing false information as to the value of the shares.
Once the price rises, they sell their shares and the price drops back down. When large companies decide to go public and list their shares on a major exchange, they first file for their initial public offering IPO. As the time nears, the company will publish its initial stock price and investors may express their interest in shares.
The shares must be purchased through underwriters, who are the stockbrokers that work with the company issuing the IPO. The underwriter helps determine pricing and then markets and sells the shares, raising capital for the company. This is a very difficult aspect of issuing an IPO and one of the reasons that they can be quite risky for investors. The value of a company during the IPO is determined using several factors.
If the underwriter prices the shares too low, then the company is essentially leaving money on the table, because they only get money for the shares sold during the IPO. One of the most infamous IPOs, and one that many point to when falsely giving hope to these investments, is that of TheGlobe.
Late in , TheGlobe. While that specific situation is unlikely to happen again, it does show the incredible volatility in IPOs, mainly because of so many unknown factors. These factors include things like public awareness and investor sentiment, which are nearly impossible to accurately measure.
This is not to say that IPOs are never a good investment. The plan is to spend the day walking a trail at the edge of Coprates Chasma, a canyon almost a thousand kilometers long more than twice the length of the Grand Canyon, they say.
You adjust the breathing mix on your hiking Thin Suit and get started. This weekend I made the long trip into the Adirondack Mountains for a backcountry first aid course. Our excellent teachers regaled us with stories of ice climbers plunging down foot cliffs and searches for lost, frostbitten winter hikers.
Listening to their tales, I reflected on the elemental drive that brings people into the mountains again and again, in spite of the inconvenience and occasional danger.
It is, of course, all about wilderness , a word drenched in poetry. With the snow piling up on pine trees outside, the astronomer in me couldn't help but ask how closely bound that poetry is to the world of our birth. When the time finally comes for us to expand beyond the boundaries of the Earth, will we find wilderness on the other worlds in our solar system. Will Mars have wilderness, for us? To answer that question we must ask what wilderness means for us at the dawn of the Anthropocene , with humans relentlessly reshaping the the Earth.
Human beings were born wild. We domesticated ourselves voluntarily. The origin of our species, Homo sapiens, lies a few-hundred-thousand years in the past. For most of our history we lived in small bands that moved with the herds and the seasons. During those many millennia, wilderness could not be separated from any other aspect of experience.
It was just where life played itself out. As the last ice-age glaciers retreated some 10, years ago, we slowly began experimenting with a new way of being human. Over time we learned to settle in one place and put the earth to plow. Agriculture brought surplus and those surpluses allowed villages to become cities and then cities to become empires. In the wake of our great city building experiments, the place we imagined for ourselves in the world changed.
That was when wilderness was born. The "wild" was outside the city walls and it was, for the most part, dangerous. Fairy tales speak of dark, haunted woods and hungry, cunning wolves for a reason. They are the collective memory of the terror that lay beyond "civilization. This sense of wilderness changed when the machine age dawned a mere years ago.
As railroads crossed continents and frontier taming went industrial, it suddenly dawned on us that the wilderness was shrinking fast. It is no accident that the great push to create the national parks in the United States began just as our relentless march across the West concluded.
In a hyper-domesticated society where most people worked in offices and factories, wilderness suddenly became sacred. John Muir articulated this new sense of wild spaces when he wrote in his journal:. There is a love of wild nature in everybody an ancient mother-love ever showing itself whether recognized or no, and however covered by cares and duties.
The exponential advance of human culture has only deepened our hunger for wilderness. As we stand at the edge of the Anthropocene Epoch, the place of nature in our lives is directly challenged every day by human development. In response, nature's appeal to our souls becomes ever more urgent.
Our collective actions now shape what wilderness will remain and what role it holds in our imaginations.