Interested In Penny Stocks? Knowing How To Buy Them Is Important
Before we tackle how to buy penny stocks, first, letâs define them. Ironically, a penny stock is not just a stock whose share price is around a penny or even under a dollar, for that matter. Penny stocks are low-priced, small-cap stocks with a share price under $5, as defined by the Securities and Exchange Commission (SEC). Â
There are penny stocks that trade outside of the major exchanges, and many often trade over-the-counter (OTC) through the OTC Bulletin Board (OTCBB) and pink sheets. However, many companies trade below $5 per share on the main exchanges like the Nasdaq and NYSE. You should be aware that with OTC penny stocks, the reporting requirements are much less strict than those of the major exchanges. They also tend to lack the same liquidity as their âlistedâ cohorts.
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