Investing 101

What Is A Penny Stock

Stocks, primarily of small scale public companies, that trades at a relatively low price and usually traded over the counter through OTCBB and pink sheets, are called as Penny Stock. There are different parameters to categorize a stock as penny stock in various markets.  According to Securities and Exchange Commission, every share below the basic value of $5 is accounted as Penny Stock. Most penny stocks are, however, below $1.