Penny stock explanation?


It would appear my interpretation of the word ‘penny stock’ is incorrect somehow.

I believed it meant a UK stock with a share price of under £1.

Someone on an investment discord says it’s got something to do with market cap.

Id assume that over a certain market cap an asset looses the title of penny stock.

Where would this cut off be.

Also can you get American penny stocks

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Maybe this helps you :+1:

Penny stocks and bargains - Beginners investing - Investing and Markets :chart_with_upwards_trend: - Freetrade Community

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A penny stock would speak not just to the fact they trade in the low pennies but are often more volatile. If you were talking to an American then they use the phrase micro cap for companies with market cap lower than $50m ish - that might be where the confusion comes from.


Would most AIM stock be considered penny stocks?

I think that’s a fairly safe bet. AIM listings are determined by market cap rather than share price but there are some that trade below 1p