Penny stocks

Penny stocks refer to common stocks which trade for less than $ e per share. It refers to any stock trading outside one of the major exchanges like NYSE, NASDAQ, AMEX etc It also sometimes refer to a low -priced security of a small company.

Penny stock's status depends upon its share price. It does not depend upon market capitalization or listing service. They are sometimes used interchangeably with other terms such as small caps, micro cap stocks, nano caps etc But in UK penny stocks or penny shares refer to stocks and shares of small companies.

Financial services Authority (FSA) issues a regulatory risk warning to cover penny shares. Penny stocks that trade on low volumes over the counter are considered extremely speculative. So it may be difficult to sell penny stock shares after buying them. Since they are not accurately priced, it may be difficult to find quotations for certain penny stocks.

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