- published: 20 Mar 2014
- views: 342682
Penny stocks, also known as cent stocks in some countries, are common shares of small public companies that trade at less than $1.00 (or similarly small amounts in other countries). For example, in the United Kingdom, stocks priced under £1 are called penny shares. In the case of many penny stocks, the market price has previously fallen dramatically and the company's market capitalisation is very small compared to the total size of the balance sheet; such stocks are considered to be highly speculative and high risk (being comparable to options that are close to being at-the-money) but may have a large potential for profit. Penny stocks in the USA are often traded over-the-counter on the OTC Bulletin Board, Pink Sheets, and other institutions such as NASDAQ.
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