Advanced StrategiesUnderstanding Penny Stocks by Peter Leeds

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Warrants, Options, Derivatives, and Rights

These are all different types of high risk investments, and we highly discourage traders from getting involved with them. Most inexperienced traders lose a lot of their money trying to learn the ropes, only to find that most experienced traders are also losing money with these.

The true purpose of options and derivatives is for use in advanced hedging strategies.

Warrants and rights are generally given to directors of companies as compensation or incentives.

While you can make money on these types of investments, you should also realize that this is a game for very experienced traders that are applying hedging strategies or have a stake in the underlying company.

You could also make money playing roulette, but in most cases you will lose. I could not suggest with good conscience that you get involved in such trading vehicles.

Having read all of the methodologies and concepts presented within this website, you are now an insider into the world of penny stocks. You have the advantage in this field, so why start looking elsewhere?

The penny stock markets will present greater profit opportunities with lower risk than options, derivatives, warrants, and rights.