Penny stock
Definition · Level 0 · Market basics
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A very low-priced share (generally under $5 in SEC usage) of a tiny company, often quoted OTC: thin liquidity, wide spreads, and high risk of manipulation and pump-and-dump schemes.
Example
Quoted 0.12 × 0.15: a 3-cent spread is over 20% of the price.
Rules and market figures change: check the current ones before relying on this.
Where Tradecraft teaches it
Level 0 · Market basics, in the lesson “Shares, dividends & splits”: Share counts, market cap tiers, the dividend calendar, splits and buybacks.
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