Penny Stock Law & Legal Definition
Penny stock is stock whose definition varies according to the entity defining such stock, but is often characterized by trading below a certain defined price per share. For example, the SEC calls all stocks that trade for less than $5.00 per share a penny stock. In some cases, penny stocks are defined by the market they are traded on. For example, some traders consider stocks that trade on the OTC BB, the OTC, the 'Pink Sheets,' or the CDNX, to be penny stocks. In some cases, organizations or individuals will treat any company beneath a certain market cap (for example, $10 million) as a penny stock. Alternatively, the definition may be based on a combination of the above factors.
Penny stocks are considered high-risk, high-reward investments. Stocks that trade so low are often at risk of bankruptcy or losing its listing with an exchange.
Legal Definitions
Search Definitions
Get a Term Defined
- Request a legal definition! Submit a term you need defined.
- » Request Legal Definition
Submit a Definition
- Submit a Definition Help us build our database. Free listings for attorneys.
- » Submit a Definition
Help Build USLegal
- Join our Team and help build USLegal. Many opportunities for participation so Join our Network.
Build USLegal
Read a Law Digest
- Need to read the law or find an answer to a legal question? Visit our Law Digest for the largest selection of law digests and answers available.
Go to Law Digest
Form Packages
- Select from our most popular legal form packages.
- » Bankruptcy
- » Contract for Deed
- » Divorce
- » Employment Packages
- » Home Sales
- » Incorporation
- » LLC Formation
- » Landlord Tenant
- » Mutual Wills
- » Name Change
- » Personal Planning
- » Partnerships
- » View All Packages
Legal Life
- Organize your legal life today! View our free online guide to creating a Life Documents File and related products.
- » Life Documents File
- » Personal Planning Package
- » Life Documents Packages
- » New Parents
- » Newlyweds
- » Baby Boomers
- » Military
- » Other
Form Drafting
- Can′t find the form you need, or need a form we offer revised for your situation? Submit your request and our attorneys will review the request and let you know if the form can be provided.
Submit a drafting request...
