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Penny Shares

A penny share contrary to popular belief is not a stock that sells or pennies. According to the SEC a penny stock is a low priced, speculative security from a very small company, regardless of market cap or whether it trades on a securitized exchange like NYSE or NASDAQ or an "over the counter" listing service, such as the OTCBB or PINK SHEETS.

In the UK a penny stock is a stock that has a market cap of less than £1million and a share price of less than £1 with a bit/spread offer of more than 10%.

Penny share companies will usually have limited assets and a very short operating history making them a rather risky deal and hence the low price. This is in contrast to large blue chip companies who will have substantial assets and operating history. Penny stock are a very business indeed, they can also be very profitable.

The next page looks at types of penny shares.

Types Of Penny Shares

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Penny Stocks Are volatile Not rated yet
Here's what I think about penny stocks, my honest opinion: STAY AWAY. They are too volatile and unpredictable. You would be better of better off making ...