answersLogoWhite

0


Best Answer

Taken directly from the US Securities and Exchange Commission, a penny stock is a "security issued by a very small company that trades at less than $5 per share." Penny stocks can be more difficult to sell than other stocks and thus carry a certain risk. Thus, a broker-dealer is required by law to provide customers with a document describing these risks. Several other rules apply to penny stocks; these can be found on the SEC website.

User Avatar

Wiki User

10y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What are the characteristics of a penny stock?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Finance

Which is good penny stock to buy?

Pennies are the best!


How would one know which Penny Stocks are the best to buy?

By reviewing penny stock newsletters, it is easy for one to know which Penny Stocks are the best to buy. One can also review popular stock message boards to see.


Can you still sell penny stock certificates?

Pennies SUCK.


What is the difference between a blue chip stock and a penny stock?

A "blue chip" is the nickname for a stock that is thought to be safe, in excellent financial shape and firmly entrenched as a leader in its field. Blue chips generally pay dividends and are favorably regarded by investors when a "penny stock" is one that cost less than $5 a stock and are sold over the counter.


What are penny stocks?

A Low-priced, Speculative SecurityThe definition of a penny stock varies depending on who you ask. Some consider any stock trading under $5 to be a penny stock while others consider any stock trading under a dollar to be a penny stock. These stocks are often traded off of the major exchanges and are bought and sold as Pink Sheets or off the Bulletin Boards. There are large risks associated with speculating on penny stocks. They can be easily manipulated by large investors like hedge funds. The bid ask spread can be large and serve as a significant barrier to making a profit. Also, the lack of liquidity can make it difficult to get in and out of your investment and cause quick price fluctuations. One thing to think about is that very seldom if ever does a stock start off as a penny stock so the stock has already had some difficulties to get to where it is at now. Anyone investing in these stocks should consider it a speculative bet. Rewards could be significant but you could very well lose everything you invested.

Related questions

What are the characteristics of a penny?

characteristics of the penny


Good penny stock newsletters and picks?

newsletters are good but you gotta play them right. penny stocks are very risky. try StockWiky.com its a penny stock alert and penny stock newsletter.


Do penny stock picks really exist?

"Yes. Penny stock picks really do exist. If you check out the stock market, you will find that the penny stock picks are really there. You should really try and keep up with the stock market."


What can one get from Penny Stock's forum?

On Penny Stocks's forum one can learn how to purchase a penny stock. One can learn about penny stocks and other information such as how to invest on the forum.


What is the best penny stock that one can buy as that has really good and fast profits?

There are lots of penny stock site that provide penny stock. In my opinion, you need to know some basic knowledge about Investing in Stock Market before you trying to accept those penny stock picks www.stockpreacher.com read everything Stock Market Education. You will know alot. Mainwhile, you can sign up from their newsletter. They will provide their premium penny stock secrets plus their penny stock alert. Just to remind you that they dun provide alot of penny stock. It is because they only picks "potential" small cap stock to provide to people. but overall to answer the question, there is no "best" penny stock because if it was about to rise really fast it would also have to sink very low very quickly hoped that helped


What are the riskiest penny stock picks to invest in?

Yes people have made great money in the penny stocks. Some has even become penny stock millionaires.


What are penny stocks and are they actually only a penny?

A penny stock is one that is relatively cheap and does not actually mean that the stock is one cent. The penny stocks are usually high risk but high reward.


How much does a typical Canadian penny stock cost?

This depends on the stock being purchased. Most penny stocks cost a penny but to buy into the stock often costs money. Check with a place such as plus500 for more information.


How can you sign up for penny stock?

Best way to find the hot penny stocks is to sign up for a newsletter service. Best one i know of is penny stock whispers.


What does penny stock alert mean?

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.


A Handy Guide About Choosing Websites that Offer Free Penny Stock Picks?

Choosing a website that offers free penny stock picks can be difficult.Many investors have difficulty choosing websites that offer free penny stock picks because there are many penny stock pick websites that offer investors bogus or useless information about penny stocks. This problem can cause headaches for investors because it forces them to waste time searching for accurate information about penny stock picks that could be used for other things.Here are some tips and suggestions that can help investors avoid these problems.Look for websites that offer investors educational resources about penny stocks.It is a good idea to look for websites devoted to penny stock picks that offer educational resources because it can help you understand the lingo and nomenclature used to describe penny stocks.Look for websites that offer investors in-depth information about penny stock companies.Investors should consider searching for websites that offer in-depth information about penny stock companies because it can help you avoid penny stock picks that are based on questionable information. This is especially true nowadays because there are many penny stock pick websites that offer unverified information about companies that issue penny stocks.Finally, be sure to avoid penny stock pick websites that require payment for its content.Generally speaking, it is a bad idea to visit penny stock pick websites that require payment for its content. This is a fair assumption because many firms offer free websites devoted to penny stock picks that offer the same information that can be found at penny stock websites that require investors to pay to see its content.As you can see, searching for high-quality penny stock pick websites takes time.However, investors who are willing to search for high-quality penny stock pick websites can find a wealth of valuable information that can help investors make better penny stock picks. As a result, be sure to use these tips to simplify your search for high-quality penny stock pick websites. It might just help you avoid penny stock pick websites that offer useless information to investors.


What are the advantages of being a penny stock trader?

The benefits of penny stock trading include a good potential, better risk to rewards ratio, and quick profits because penny stock trading allows for large gains in day or at most, weeks.