Trading of Penny StocksPenny stocks or micro cap stocks are those stocks having a maximum rate of $5.0 per share and are generally traded in over the counter market, however these stocks can also be traded at NYSE or NASDAQ. Majority of penny stocks are traded below $1.0. Smaller companies whose market capitalization is below 5 million offer the penny stocks or whose number of shares multiplied by share price is below 5 million. In general penny stocks are traded in over the counter market or OTCBB and pink sheets and the shares are available for pennies that’s why these are known as penny stocks. The earning potential in this market is huge once you are able to spot the potential legitimate penny stock. Share markets: The major stock exchanges include the NYSE, NASDAQ, OTCBB and pink sheets. Penny stocks are traded in all the markets and as per the SEC (The securities and exchange commission of United States) definition; the share price of penny stocks is below $5.0. There are minimum requirement for trading at NYSE and NASDAQ. There is only one requirement for trading of penny stocks at OTCBB and that is it should remain current in SEC filing. There is no place for a penny stock quotation if the stock does not meet the minimum standards set by different stock exchanges or OTCBB. Sometimes the penny stocks already being quoted at OTCBB, do not meet the SEC requirement will be allowed a certain period for completing the formalities and if the companies do not fulfill the required condition even after a 30 or 60 period of grace time, the penny stocks will be removed from their listing. Pink sheets play a major role in over the counter trading. National Quotation Bureau or NQB provides this service. In actual the NQB prints the details of share prices and other information on pink sheets, as it is difficult to obtain the prices of these shares otherwise. Most of the time brokers get the price and other information on penny stocks from market makers and provide it to the customers. In today’s Internet era, you can find the details of penny stocks just a click away at the website of pink sheet. A company has to meet the minimum requirement of pink sheet for listing and quoting of the share at pink sheets. Companies prefer to list the shares at NYSE, as it is highly preferred stock exchange. The next preference is given to NASDAQ and then comes the NASDAQSC. NASDAQ in recent past has become more popular and companies who have listed their shares at NYSE are also interested to list the shares in NASDAQ. The last preferences are OTCBB and Pink Sheets. Various stock exchanges have laid down the minimum requirement for listing the shares at the stocks exchanges. Pink sheets has the minimum requirement for listing shares at it and in this age of Internet the share information can be gathered at the website of pink sheets.
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