Because penny stocks are prone to violent fluctuation (volatility), many people believe that they'll luck out with a stock that will jump from $0.08 to $8 in two weeks. And it's happened. Scour enough investing message boards and you're sure to find success stories from investors who made a mint while "playing the pennies."

Companies that can successfully make the jump from penny stock to power stock are rare, but when you find them they pay out in spades. Numbers vary quite a bit in the penny stock world, but investors have raked in gains over 1,000% in a couple weeks' time. The real trick is finding the right stock.

Next: Understand the Risks of Investing in Penny Stocks