Penny Stock

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Definition of 'Penny Stock'

A penny stock is a stock that trades for less than $5 per share. Penny stocks are often considered to be high-risk investments because they are typically issued by small, unknown companies with limited financial resources. As a result, penny stocks can be more volatile than other types of stocks and may be more susceptible to fraud.

There are a few things to keep in mind if you are considering investing in penny stocks. First, do your research and make sure you understand the company before you invest. Second, only invest money that you can afford to lose. Third, be aware of the risks involved with penny stocks and don't expect to get rich quick.

Penny stocks can be traded on both the OTC Markets and the major stock exchanges. However, most penny stocks are traded on the OTC Markets, which is a less regulated market than the major stock exchanges. This means that there is less oversight of penny stocks and investors may have less protection from fraud.

If you are considering investing in penny stocks, it is important to be aware of the risks involved. Penny stocks can be very volatile and may be more susceptible to fraud. As a result, it is important to do your research and only invest money that you can afford to lose.

Here are some additional resources that you may find helpful:

* The Securities and Exchange Commission (SEC) has a page on penny stocks that provides information on the risks involved with investing in penny stocks.
* The Financial Industry Regulatory Authority (FINRA) has a page on penny stocks that provides information on how to identify penny stocks and the risks involved with investing in them.
* The National Association of Securities Dealers (NASD) has a page on penny stocks that provides information on the risks involved with investing in penny stocks.

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