What is a Penny Stock? Securities Lawyer 101

OTC Markets Penny Stock

The term “penny stock” refers to a security issued by a company whose shares that trades at less than $5 per share. Penny stocks generally are quoted over-the-counter, such as on the OTC Markets Group, Inc.’s OTC Link LLC. Penny stocks can also trade on stock exchanges like the New York Stock Exchange or NASDAQ Market. Typically, penny stocks trade less frequently than non-penny stocks. Most brokerage firms will not allow their customers to deposit penny stocks. Many penny stock companies are not reporting with the Securities and Exchange Commission which may make it difficult for investors to obtain reliable information about them.