Penny Stock Listings

There are penny stocks that are traded on virtually every world market and exchange available. Penny stocks are at the top of speculative investments.  However, with volatility, investors have the chance to deliver tremendous returns on small investments, as well as take stake in what might become the next leading corporation.

Pink Sheets

The Pink Sheets are notorious for the number of penny stocks that trade on the exchange. While not a stock exchange in the traditional sense, the Pink Sheets market is a place where buyers and sellers can make trades and exchange shares. Pink Sheet corporations are some of the worst in terms of performance; many companies on the Pink Sheets have already failed, even though their stock still trades. Others are legitimate small businesses looking for extra capital. Some are the fallen stars of the larger stock exchange that have found themselves in one of the smallest stock exchanges in the world.

Less Regulations

Pink Sheets have virtually no regulation. The SEC does not monitor the pink sheets, nor does any other government authority. The exchange itself does not call itself a stock exchange, but is rather a place where buyers and sellers can make trades over the counter. The many different broker-dealers that operate on the Pink Sheets are regulated, but the financial documents nor the well-being of the corporation in question is never reviewed by a third party unless released by the company itself. In this kind of market, each purchase should be treated as an "as-is" sale. Do not expect to buy a thriving company on a market of this size.

OTC market

The over the counter market is far more regulated than the pink sheets; the companies that are listed over the counter must file with SEC regulators and make sure that all information is current. For this reason, OTC stocks are much safer, although they are as difficult to buy as stocks on the Pink Sheets. Because so few broker-dealers operate on the exchanges, broker access will only allow you to buy a limited number of select companies. The others can only be bought on sold with phone contact or direct purchases from other investors.

The Major Exchanges

The major exchanges, such as the NASDAQ and NYSE, require minimum share prices of $1. There are penny stocks ranging from $1.01 to $5, and the occasional few stocks that tread water under $1, but are soon delisted because they don't reach the $1 per share rule. The major markets are the best places to buy penny stocks. Penny stocks on the major exchanges are legitimate businesses that simply don't have high share prices. Although it is true that plenty are slowly edging towards bankruptcy, many thriving businesses have share prices sub $5 per share.  For example, at the time of publication, Ford is currently trading under $5, which would place this major corporation into the category of a penny stock.

Buying Penny Stocks

It is important to consider that penny stocks are volatile and move quickly with news and other events. Investing in penny stocks is extremely speculative and can be profitable if invested correctly. The most important element behind penny stocks is due diligence; looking into each investment will improve your success rate and help you avoid the companies that will never come back from their penny stock prices.