A ‘Penny Stocks’ is a loose term used to describe shares which have a speculative appeal because of their low value. There is no official rule to define when a stock becomes a Penny Stocks and different observers may use different criteria.
Most brokers will stipulate that a penny share must have a value below some upper limit. Others may specify a ceiling on the Market Capitalisation of the company.
In terms of the shares listed on this website we use a combination of the above criteria to decide which companies to feature and so not to miss any shares with potential.
The essence of these companies are that they will more than likely only have a small amount of net tangible assets and a short operating history. This is in contrast to shares in large blue-chip companies which will have the stability of a large amount of assets and a long trading history to fall back on. This is what makes penny stocks such a volatile proposition and yet in turn makes them such exciting prospects.
Penny stocks and shares guide:
- What are Penny Stocks?
- Types of Penny Stocks
- Where are Penny Stocks Traded?
- Why Trade Penny Stocks?
- Researching Penny Stocks
- Who Should Trade Penny Stocks?
- Investing Glossary
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