What is a Penny Stock?

A penny stock can be defined as the shares of small companies that trade for lower than $5 per share. In the early days, ‘penny stocks’ was a term used to describe shares that traded for pennies on the dollar. In Canada, Penny stocks trade on Venture exchange and Canadian Securities Exchange depending on their grades. Penny stocks with a good grade trade on the Venture exchange while the penny stocks that have a very low-grade trade in the Canadian Securities Exchange.