1. Home
  2. Glossary
  3. Penny stock

Penny stock

German: Pennystock

A stock with a very low price and usually a tiny market value – often extremely risky.

In the US, the SEC defines penny stocks as shares trading below $5. Many trade over the counter with little liquidity and wide spreads, and they’re a favourite vehicle for manipulation such as “pump and dump” schemes. A low price doesn’t make a stock cheap.