What Are U.S. Penny Stocks? Complete Beginner Guide (2025)
What Are U.S. Penny Stocks? A Complete Beginner-Friendly Guide U.S. penny stocks are one of the most talked-about topics in the stock market, especially among new investors. They offer the chance for big profits, but they also come with high risk. In this article, you’ll learn what penny stocks are, how they work, where they trade, and the risks involved. What Are Penny Stocks? Penny stocks are shares of very small companies that trade at a low price—usually below $5 per share in the United States. These stocks are typically issued by new, small, or financially unstable companies. Where Do Penny Stocks Trade? U.S. penny stocks usually trade on: 1. OTC Markets (Over-the-Counter) This is the most common platform. These companies are not listed on major exchanges because they don’t meet strict financial requirements. 2. Pink Sheets A very risky marketplace with almost no reporting requirements. Many penny stocks here lack proper financial information. 3. NASDAQ or NYSE (Rarely) Some ...