Penny Stock
Definition
What is Penny Stock?
A very low-priced, small-company share that often carries high volatilityThe degree and frequency of price or return fluctuations. and liquidity riskThe risk that an asset cannot be sold quickly at a reasonable price or a redemption cannot be met promptly..
Example in practice
How This Looks in Practice
A thinly traded share priced below ₦1 may be described as a penny stock.
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Related Terms
Common Stock
A share that usually carries voting rights and a residual claim on a company's profits and assets.
Equity InvestingOrdinary Share
The standard ownership share in a company, generally equivalent to common stock.
Equity InvestingPreferred Stock
A class of share that usually has priority over ordinary shares for dividends and liquidation proceeds.
Equity Capital MarketsInitial Public Offering
The first public sale of a private company's shares, after which the shares may trade on an exchange.