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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
If you can, then there are penny stocks to watch every day.
Finally, because penny stocks are bought and sold over the counter, as opposed to on a public exchange, they trade less frequently than regular stocks.
Data obtained from the NSE indicated that Unic Diversified Holdings, another penny stock, came second, dropping by 47.83 per cent to close at 24k per share against the opening price of 46k.
Without admitting or denying the findings, Torres agreed to be barred from the securities industry and penny stock trading, and he must pay $225,000 in disgorgement plus $25,700 in interest, and a $160,000 penalty.
"Unfortunately, many unsophisticated investors fall in the trap of penny stock investing in an attempt to make a quick buck," Wall said.
According to experts, penny stocks are not great options if one is looking for a way to get rich quickly.
Singapore - Regulators in Singapore are planning to issue a consultation paper that will propose tighter rules for companies looking to list in the city-state, months after the stock exchange was hit by a penny stock scandal.
"Retail investors are very active in the market, targeting the penny stocks and the highly liquid names," Sebastien Henin, portfolio manager at The National Investor, said of Dubai.
The shares, which are penny stocks and "highly speculative," also broke a "major resistance," which spurred buying by retail investors, he said.
The scheme involved fraudulently inflating share prices and trading volumes of certain penny stocks. The defendants also operated a so-called advance fee scheme, making false promises to investors to induce them to pay fees for non-existent services to sell their illiquid penny stock shares, according to the indictment.
20, 2010, Oppenheimer, through branch offices located across the country, sold more than a bn shares of twenty low-priced, highly speculative securities (penny stocks) without registration or an applicable exemption.
Along with this new messaging service, comes a platform that provides additional support to investors, particularly day traders in futures trading, stock options, stocks, penny stocks, online stocks as well as Forex trading.