Penny stock

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Penny stock

Used in the context of general equities. Stock that typically sells for less than $1 a share, although it may rise to as much as $10/share after the initial public offering, usually because of heavy promotion. All are traded OTC, many of them in the local markets of Denver, Vancouver, or Salt Lake City.

Penny Stock

Stock in a very small company with low market capitalization and low prices. Penny stocks are considered highly speculative and rarely are traded on an exchange because so few meet listing requirements. While there is no hard-and-fast definition of what stocks are considered penny stocks, they usually have a share price under $5 and come from a new, unestablished company. While most companies issuing penny stocks fail, investing in these stocks can lead to extraordinarily large returns.

penny stock

A low-priced, speculative stock. Although the maximum price at which a security may sell and still be classified as a penny stock is subject to individual interpretation, $1 is probably the most commonly recognized limit. Many penny stocks are traded in the over-the-counter market and on smaller exchanges.

Penny stock.

Stocks that trade for less than $1 a share are often described as penny stocks.

Penny stocks change hands over-the-counter (OTC) and tend to be extremely volatile. Their prices may spike up one day and drop dramatically the next.

The fluctuations reflect the unsettled nature of the companies that issue them and the relatively small number of shares in the marketplace. While some penny stocks may produce big returns over the long term, many turn out to be worthless.

Institutional investors tend to avoid penny stocks, and brokerage firms typically warn individual investors of the risks involved before handling transactions in these stocks.

However, penny stocks are sometimes marketed aggressively to unsuspecting investors.

References in periodicals archive ?
Isaac and Law are also directors of Chartsearch Financial Services and publishers of the authoritative publication Penny Share Focus, aimed at investors who like to dabble in the stock market.
But the group warned that penny shares tend to be highly volatile and the insider tips were usually rubbish.
Steve, a financial adviser, says: "I enjoy picking penny shares.
They accentuated the benefits of investing in the penny shares recommended by Highbury without 'clear and fair mention of material risks in shares generally and penny shares in particular'.
If you only intend to buy penny shares now and again, or even make a one-off purchase, take a look at the Share Centre at this site.
BRIAN STOCKBRIDGE, Craig Whyte, Malcolm Murray, money's tight, Lloyd's Bank, Bill Ing, Rafat Rizvi, Dave King, Norman Crighton, Richard Hughes, Ticketus, penny shares, buy into Rangers if you dare, James Easdale, Charles Green, Jim McColl, you've heard them all.
In a year when many Birmingham and West Midlands stockbrokers pinned their hopes of our promised magnum of champagne on penny shares, CYC started out at a fraction of a penny.
This ultimately allows directors to approach anyone of their choosing, without the backing of existing shareholders, and look for loans that can be converted to penny shares.
It was also a year when penny shares threw off the brightest sparks.
Prior said: "The nail in Stockbridge's coffin are resolutions nine and 10 at the agm, which allow directors to seek loans from individuals they choose, with the debt converted to penny shares.