Penny Stock

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Dictionary Says

Definition of 'Penny Stock'

A stock that trades at a relatively low price and market capitalization, usually outside of the major market exchanges. These types of stocks are generally considered to be highly speculative and high risk because of their lack of liquidity, large bid-ask spreads, small capitalization and limited following and disclosure. They will often trade over the counter through the OTCBB and pink sheets. 

Investopedia Says

Investopedia explains 'Penny Stock'

The term itself is a misnomer because there is no generally accepted definition of a penny stock. Some consider it to be any stock that trades for pennies or those that trade for under $5, while others consider any stock trading off of the major market exchanges as a penny stock. However, confusion can occur as there are some very large companies, based on market capitalization, that trade below $5 per share, while there are many very small companies that trade for $5 or more.

The typical penny stock is a very small company with highly illiquid and speculative shares. The company will also generally be subject to limited listing requirements along with fewer filing and regulatory standards.

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'Penny Stock'

  • What is a penny stock?

    http://www.investopedia.com/ask/answers/03/072503.asp
    The term penny stock has evolved with the market. In the past, penny stocks were
    stocks that traded for less than a dollar per share. ... What is a penny stock? ...

  • The Lowdown On Penny Stocks

    http://www.investopedia.com/articles/03/050803.asp
    ... (Less than $50 million is a nano-cap.) According to the Securities & Exchange
    Commission (SEC), any stock under $5 is a penny stock. ...

  • Catching A Lift On The Penny Express

    http://www.investopedia.com/articles/trading/04/072804.asp
    The popularity of the penny stock market has grown,
    but are these stocks a safe bet? ...

  • Spotting Sharks Among Penny Stocks

    http://www.investopedia.com/articles/stocks/07/penny_stocks.asp
    ... and The Lowdown On Penny Stocks.) The Myth of Evolution One thing that keeps people
    dabbling in penny stocks is the belief that penny stock corporations will ...

  • 20 Investments: Common Stock | Investopedia

    http://www.investopedia.com/university/20_investments/5.asp
    ... stock in a well-established and profitable company means there is much less risk
    you'll lose your investment, whereas purchasing a penny stock increases your ...

  • Dangerous Advice For Beginner Investors - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0810/Dangerous-Advice-For-Beginner-Investors.aspx
    ... Market Timing.). 5) "Buy Penny Stocks". Emails, advertisements, friends and even
    family members often trumpet penny stock investing for new investors. ...

  • 6 Dangerous Moves For First-Time Investors

    http://www.investopedia.com/articles/basics/11/dangerous-moves-first-time-investors.asp
    ... great idea. With as little as $100, you can get a lot more shares in a penny
    stock than a blue chip that might cost $50 a share. And ...

  • The Alphabet Soup Of Stocks

    http://www.investopedia.com/articles/02/102502.asp
    ... Penny Stock - The term "penny stock" is used to denote stocks that trade for less
    than a dollar, but can also refer to stocks that are considered very ...

  • An Introduction To Small Cap Stocks

    http://www.investopedia.com/articles/01/080101.asp
    ... are a whole different ball game. It is possible for a stock to be a small
    cap and not a penny stock. In fact, there are plenty of ...

  • Spot Hotshot Penny Stocks

    http://www.investopedia.com/articles/stocks/07/spot_pennystocks.asp
    ... ahead. Three Penny Winners Here are three examples of stock that came up
    in our scan and how the trades developed over time. The ...

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