In the stock market, there is a group of stocks that are often overlooked and/or looked down upon and talked badly about. This group of stocks that generally has a bad reputation in most circles is what are referred to as “penny stocks” and are very low priced.

The official definition from the SEC is below:

The term “penny stock” generally refers to low-priced (below $5), speculative securities of very small companies. While penny stocks generally trade over-the-counter, such as on the OTC Bulletin Board or in the Pink Sheets, they may also trade on securities exchanges, including foreign securities exchanges. In addition, penny stocks include the securities of certain private companies with no active trading market.

While investors in general look down on penny stocks and would caution others to stay away from them, there are others who see them as a great opportunity. Watch for upcoming posts highlighting some of the advantages and disadvantages of penny stocks and then make your own opinion.