Tuesday, June 26, 2012

Restricted shares

Restricted shares are insider holdings that are under a sales restriction.

Authorized shares

The authorized shares are the maximum number of shares that a company is legally permitted to issue.

Float

The float is the total number of shares publicly owned and available for trading. The float is calculated by subtracting the restricted shares from the outstanding shares.

Sunday, June 24, 2012

Spread

The spread is the difference between the bid and ask prices.

Bid / ask price

The bid price is the price at which you could sell your shares. The ask price is how much you will have to pay to buy shares.

Wednesday, June 20, 2012

Outstanding shares

The outstanding shares are stock currently held by investors, restricted shares owned by the company's officers and insiders, and shares held by the public. Shell stocks with lower outstanding shares (a few million or less) are better than ones with shares in the hundreds of millions or more. There is less chance of a reverse split with less shares. If there is one, the reverse split will usually be smaller.

Types of shell stocks

Some shell stocks are listed on the pinks sheets, while others are on the OTC. Shell stocks listed on the pink sheets are more risky investments, since they do not have to file current financial statements. You will know less information about them.

Pink sheets

The pink sheets is where smaller companies trade. Stocks on the pink sheets can trade for just pennies a share or less. Many shell stocks are listed on the pink sheets. Stocks on the pink sheets do not have to file current financial statements.

OTC

The OTC is where smaller companies trade. Stocks on the OTC can trade for just pennies a share or less. Many shell stocks are listed on the OTC. Stocks on the OTC have to file current financial statements.

Bull

A bull is an investor who believes that a stock or the entire market is headed upward. Bulls try to profit from a rise in the price of a stock. A bull is the opposite of a bear.

Bear

A bear is an investor who believes that a stock or the entire market is headed downward. Bears try to profit from a drop in the price a stock. A bear is the opposite of a bull.

Limit order

A limit order to buy is the exact price you are willing to pay per share or less. If the stock price is above your amount, your order to buy shares will not take place.

Checking shell stocks

It is important to follow the news on the shell stocks that you own all the time and check the prices often or else you may miss out on important information. Message boards and forums are great places for information.

Price of shell stocks

Most shell stocks are very low in price; from about .005, which is a half a penny per share, or near .10 or .50 a share. The range can be outside of these amounts though.

How to buy shell stocks

Due to the low price, a limit order is usually required to buy shell stocks. You have to set the most you will pay for the stock before you place the order. The price you enter should be near the last trade price.

Get information on shell stock

Get as much information on the shell stock as you can find, making your decision on whether to buy it or not will then be more informed.

Using judgement on shell stocks

Sometimes picking the right shell stock can be just luck, but sometimes your own judgement is best on which ones to buy and which ones not to buy.

Shell stock

A shell stock is a company that is no longer in business. The intention is of a reverse mergeer into a non public company that already has an on-going business. The merger then creates a new public company that is generating revenue.

Reverse merger

A reverse merger is a way for a private company to go public. It is less expensive and much quicker than an IPO.

When to sell shell stocks

The best time to sell a shell stock is after a reverse merger (if one does happen), or not too many months longer after a reverse merger. Some shares can always be kept longer. But since the stock was bought at a low price to begin with, the gains are already large enough for profit.

More information on shell stocks

More information about shell stocks and be found online, by typing "shell stocks" in a search engine.

How many shares to buy

It is usually best to buy no more than 10,000 shares of any shell stock. If one is .005 cents per share, it would cost $50 for 10,000 share. If they are more expensive at .05 -.10 or higher, then just a few thousand shares or less would be a good amount. You never want to risk losing all of your money by just investing it in one shell stock.

Shell stocks risks

It is possible some of the shell stocks will no longer trade, your shares then can't be sold. Also, when there is volumn on them, it is usually very little making it hard to buy or sell them.

Potential price increase of shell stocks

The potential price increase of some of the highest shell stocks after a reverse merger have been well over 10,000%, with a much rarer high near 30,000%. Most though are only in the few hundred percent increse in share price or less.

Shell stocks to buy

You can find shell stocks to buy, by reading message boards on the subject of reverse mergers or by finding web sites by typing "shell stocks" in a search engine.

How long to hold shell stocks

Most shell stocks should be held for a very long time, and not sold too quickly or you may miss out on a reverse merger. Several years is a good time frame.