This usually doesn’t happen with regular stocks. Because most penny stocks are highly speculative, even a minor piece of news can quickly impact the stock price. The trick is to find out which applies to the company you want to invest in.īecause of their volatility penny stocks are considered a far riskier investment than regular stocks. But it could also be a new company looking to finance growth potential or an established company that has had some troubles and has a potential to rebound. The company selling them may be facing financial, legal or repuatational issues. However, penny stocks are usually priced low for a reason. You can get started with just a few hundred dollars.

It is easier to get into investing with penny stocks as they are often far less expensive than regular stocks. Which investment is right for you – penny or regular stocks – depends on several factors including pricing, volatility, risk and research. There is also the potential to lose a lot of money very quickly, too. Because penny stocks can be much more volatile than regular stocks, there is the opportunity to make large sums of money in a shorter period of time. Like other traders, those that trade penny stocks may be in it as a short-term or long-term investment. There’s also the potential to lose a lot of money very quickly, too. Because penny stocks can be a lot more volatile, there’s the opportunity to make large sums of money in a shorter period of time. Like other traders, those that trade penny stocks may be in it for the short-term or long-term investors.

However, companies listed on the Pink Sheets don’t have to make SEC filings. Even firms that trade on the OTCBB have to file financial statements with the Securities and Exchange Commission ( SEC ). For instance, the disclosure requirements and corporate governance requirements for TSX-listed companies are stricter than those listed on the TSX Venture Exchange.Ĭompanies listed on the NYSE and Nasdaq also face a lot more regulation than they would if they traded on other exchanges. However, some of the less popular penny stocks don’t have a large trading volume or may have no volume for many days in a row.ĭepending on what exchange a stock trades, the listing requirements vary. For instance, it’s common to see penny stocks among the top 10 most active stocks on the TSX on any given day. Penny stocks may have higher volume than regular stocks. Regular stocks also tend to trade on larger exchanges such as the TSX, NYSE, and Nasdaq. Penny stocks usually trade below $5 each, while regular stocks trade for $5 or more. How Are Penny Stocks Different from Regular Stocks? The TSX Venture Exchange was previously known as the Canadian Venture Exchange (CVE) and the exchange will be listed by it’s short form CVE in stock searches.Ī company will move to the TSX to increase liquidity, to improve the chances of receiving analyst coverage, and to raise its profile among small and large investors. When a Canadian publicly traded company grows large enough, it typically graduates by moving to the TSX from the TSX Venture Exchange. While penny stocks do trade on larger exchanges like the TSX and NYSE, they’re usually associated with smaller and lesser-known exchanges. In the U.S., they trade on the New York Stock Exchange ( NYSE), Nasdaq, the Over-The-Counter Bulletin Board ( OTCBB), and Pink Sheets.

In Canada, penny stocks trade on the Toronto Stock Exchange ( TSX), TSX Venture Exchange, Canadian Securities Exchange, and NEO Exchange. However, there are some exceptions to the rule. They’re often small companies in terms of market capitalization and don’t have a lot of trade volume. Most companies whose shares trade at less than $5 each aren’t usually well known. Penny stocks are stocks typically traded at less than $1 each, although many investors consider stocks that trade for less than $5 apiece to be penny stocks.

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