Penny Stocks Trade

Penny stocks are stocks that trade for less than $5 per share. They are attractive investments for people who are willing to take on a higher risk for the potential of higher returns. A common example of a penny stock is a company that has recently gone public, but has not yet established itself as a large, well-known corporation.

The formula for calculating the value of a penny stock is the current stock price multiplied by the number of outstanding shares. For example, if a penny stock is valued at $1 per share and there are 1 million shares in circulation, the total market capitalisation is $1 million.