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Penny Stock

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What Is A Penny Stock
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What Is A Penny Stock
Definition: An inexpensive issues of stock, that typically sell at less than $1 per share, in companies that often are newly formed or involved in highly speculative ventures.

Penny stocks are also known as Micro-cap stocks. Micro-cap stock refers to companies that have a market capitalization of less than $300 million.

A Penny Stock is a security issued by a very small company that trades at less than $5 per share.

Penny stocks may trade infrequently, which means that it may be difficult to sell penny stock shares once you own them.
What The Law Requires?
Before you buy penny stock, federal law requires your salesperson to tell you the "offer" and the "bid" on the stock, and the "compensation" the salesperson and the firm receive for the total trade.
The firm also must send a confirmation of these prices to you after the trade.
You will need this price information to determine what profit or loss, you will have when you try to sell your stock.
Recommend to Invest?
Due to the very high risks and many listed diadvantages that penny stocks can create, we would not recommend them to beginning investors. It would be better to study more on regular stocks then to take the risk with small businesses, when/if you aren't really familiar with this type of stock.