Posts Tagged ‘penny stock education’

Trading Tips Part 3: Understanding Share Structures

Posted on: February 16th, 2011 by psrumors No Comments

Hello readers ! Today we would like to go over a very important factor in the volatility of penny stocks. The share structure of a stock should be one of the very first things one should look at before considering their decision to trade a certain stock. Share structures affect volatility and liquidity, and today you will find out the general parts of what information a share structure can infer. We will work our way down from largest to smallest.

There are three main parts of a share structure: authorized shares, outstanding shares, and float.

For this article, we will be using HNSS as an example. We are not affiliated with HNSS in any way. We chose it because our source of data has a share count for each part of HNSS’s share structure. We will be referring to otcmarkets.com for data.

Every stock has a certain amount of authorized shares. Investopedia.com has a very clear definition of authorized shares: “Authorized shares refer to the largest number of shares that a single corporation can issue. The number of authorized shares per company is assessed at the company’s creation and can only be increased and decreased through a vote by the shareholders.”

  • According to otcmarkets.com, HNSS at 4,000,000 shares authorized.

Outstanding shares refer to the number of shares “that a company actually has issued. This number represents all the shares that can be bought and sold by the public as well as all the restricted shares that require special permission before being transacted”

  • According to otcmarkets.com, HNSS has 170,833,333 shares outstanding.

“Shares that can be freely bought and sold by public investors are called the float.” The float ties in closely with the definition of authorized shares. The float is the most important part of a share strcuture. For the most part, the lower the float, the more volatility a stock usually has.

  • According to otcmarkets.com, HNSS has 31,087,127 shares in the float.

There you have it ! Once you get into the habit of checking a company’s share structure before you invest, you will soon learn the importance of a relatively low share count versus a relatively high share count.

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Trading Tips Part 2: Finding "Dump the Run" Candidates

Posted on: November 2nd, 2010 by psrumors No Comments

“Dump the run” refers to a term where a stock falls significantly, and is met with intense buying at discount prices. One of the most popular “dump the run” plays was BANI.

BANI was a fairly inactive stock, with the last sale price being 1 cent. In may, the stock fell sharply, hitting .0007 several times.

At the time, BANI was down 93%. Over the next 2 days, BANI saw huge amounts of buying. The next day, BANI traded as high as .0024, representing a 300% + gain. The second day, BANI traded up to .0078, representing a gain of over 1000% had you grabbed shares toward the bottom of this run. Even from .001, BANI gave gains of over 600%. This started a new trend for penny stocks, and since BANI, we have seen several other plays very similar. It is rumored that some companies do this on purpose to create free awareness for their company.

One question people ask is how can you find these stocks as they are happening. One technique guaranteed to give you an advantage would be to set up an Equityfeed screener. Here is the criteria we use for our “dump the run” screener.

We like to sort this screener by percentage change. You can sort yours however you like.

We run this screener on a secondary monitor, and check on it when we see some movement. We believe that this screener is better than waiting for chatrooms to share the information. We can’t tell how you to trade these plays, but if you see a stock down 95%, and steady buys at ask, it may be time to look deeper and evalulate level 2.

This tutorial is for informational purposes only. It is up to YOU how you use it. This screener will only bring potential “dump the run” candidates to your attention faster than waiting for a loyal chatroom member to share the info. We are not affiliated with EquityFeed in any way.

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Trading Tips Part 1: How to Catch Momentum

Posted on: October 24th, 2010 by psrumors 3 Comments

Hello readers and subscribers ! I would like to present to you Part 1 of our Trading Tips articles. This post is about setting up an EquityFeed screener / filter to catch possible momentum plays. The purpose of this screener is to be as vague as possible (to catch just about anything) while being fairly specific so that you are not having to look at 100 stocks every hour.

We believe that this screener is the best screener one could use to find momentum / unusual volume plays. Here are the settings for our “Momentum” EquityFeed filter. To create a filter like ours, open up EquityFeed, and click on “Streaming Filter”. We are NOT using their new filter (2.0) as we like their original filter much better.


You will then be brought to a new window with a list of stocks. We want to organize this list somehow. Click the TIME column until you see an arrow pointing downThis will bring each stock to the top of the list, every time a trade occurs.

There you have it! This filter will bring possible momo plays to your attention. The more you use this filter, the better you will be at knowing which stocks are worth looking into further. This past friday, a total of just 43 stocks hit our screener. When we trade, we end up running this filter on its own monitor and checking out each stock as it comes to the top of our filter. ~50 stocks for one entire day is not much at all. If we see constant buys at the ask and a strong level 2, we jump in hoping for a momentum-type run.

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This article is for informational purposes only. We are not affiliated with EquityFeed in any way.