We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies. You can view our cookie policy and edit your settings here, or by following the link at the bottom of any page on our site.
Penny stocks definition
Penny stocks are not actually worth a penny but they are the shares of smaller companies with a low value. There’s no official definition of a penny stock, but generally the companies have a market value, known as market capitalisation, of less than £100 million and the individual shares are worth less than 50 pence each. In the US, penny stocks used to trade for below one dollar a share, but are now generally defined as those trading for less than $5 a share.
Penny stocks definition
Penny stocks are not actually worth a penny but they are the shares of smaller companies with a low value. There’s no official definition of a penny stock, but generally the companies have a market value, known as market capitalisation, of less than £100 million and the individual shares are worth less than 50 pence each. In the US, penny stocks used to trade for below one dollar a share, but are now generally defined as those trading for less than $5 a share.
In the UK, you will find penny stocks listed on the London Stock Exchange, particularly on its junior AIM market. As these companies are smaller and often younger companies, there’s a greater risk associated with trading penny stocks, although returns can also be high. Some penny stocks can be highly illiquid, adding to the risks.