Penny stock
Common shares of small public companies that trade for less than one dollar per share / From Wikipedia, the free encyclopedia
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Penny stocks are common shares of small public companies that trade for less than one dollar per share.[1] The U.S. Securities and Exchange Commission (SEC) uses the term "Penny stock" to refer to a security, a financial instrument which represents a given financial value, issued by small public companies that trade at less than $5 per share. Penny stocks are priced over-the-counter, rather than on the trading floor. The term "penny stock" refers to shares that, prior to the SEC's classification, traded for "pennies on the dollar". In 1934, when the United States government passed the Securities Exchange Act to regulate any and all transactions of securities between parties which are "not the original issuer",[2] the SEC at the time disclosed that equity securities which trade for less than $5 per share could not be listed on any national stock exchange or index.
![]() | The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (February 2024) |