Penny stock
A penny stock is a very low-priced share (often under $5, sometimes a few cents) of a small company — typically thinly traded and higher-risk.
A penny stock is a stock trading at a very low price per share — the SEC generally applies the term to shares under $5, though many trade for pennies. They are usually issued by small companies, often trade over-the-counter rather than on major exchanges, and change hands in low volumes.
Penny stocks are considered high-risk and speculative: thin trading makes prices jumpy and hard to exit, information is often scarce, and the space attracts "pump-and-dump" schemes that inflate a price before insiders sell. Their low absolute price is not a discount — a $0.50 stock can be far more expensive relative to its business than a $500 one.
stocks-llm covers established companies across the S&P 500, NASDAQ-100, Dow, and Russell 1000/2000 — large-, mid-, and small-cap names, not true penny stocks. Genuine sub-$5 microcaps are largely outside the covered catalog. This definition is educational only.
See more terms in the stocks-llm glossary.
Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.