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Penny stocks, also known as cent stocks in some countries, are common shares of small public companies that trade at low prices per share. In the United States, the SEC defines a penny stock as one that trades below $5 per share . In the United Kingdom, stocks priced under $1 are called penny shares. In the case of many penny stocks, low market price inevitably leads to low market capitalization. Such stocks can be highly volatile and subject to manipulation by stock promoters and pump and dump schemes. Such stocks present a high risk for investors, who are often lured by the hope of large and quick profits. Penny stocks in the USA are often traded over-the-counter on the OTC Bulletin Board, or Pink Sheets. In the United States, both the Securities and Exchange Commission and FINRA have specific rules to define and regulate the sale of penny stocks.
While many people may be tempted to head to OTCBB.com for information probably a better place would be here http://www.otcmarkets.com/home to get information on OTC Bulletin Board stocks.
What types of companies are traded on the OTCQX, OTCQB and OTC Pink marketplaces?
Companies that trade on our marketplaces span a broad range of sectors, from the ADRs of large cap conglomerates to small and micro-cap growth companies, SEC reporting companies and community banks; and across all major industries, including metal and mining, financial services, oil & gas, utilities, telecommunications, media, pharma & bio tech, and many others. The 10,000 securities on our marketplaces are traded through our SEC-registered Alternative Trading System, OTC Link® ATS.
Definition of ‘Over-The-Counter Bulletin Board – OTCBB'
Stocks that trade on the OTCBB, will have the suffix “.OB”. http://www.investopedia.com/terms/o/otcbb.asp