Monday, February 18th, 2008...3:22 pm
What are penny stocks?
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A question most new investors come up with: “What are penny stocks?”
Strangely there is no set definition, some consider any thing priced below $5 as a penny stocks. In the UK, any company below £100 million in market cap and trading below £1 is considered a penny stock. In the US, generally anything below $500M in market cap is considered a penny stock, but this definition changes between different investment houses, some consider anything below $1B a penny stock or small cap stock.
To keep things simple, here on HSM we generally refer to anything below $5 and trading on the OTC, Pinks or Nasdaq as a penny stock. There are exceptions, but the rule works most of the time.
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