# Penny Stock

*Trading & Technical Analysis — Finicade finance glossary*

A penny stock trades at a very low price, usually over the counter rather than on a major exchange, with minimal disclosure requirements. The combination of low price, thin liquidity and weak reporting makes them the natural habitat of pump and dump schemes. A low share price is not cheapness — it says nothing about valuation, only about how the shares were divided.

**Also known as:** penny stocks, OTC stocks, microcap

**Related terms:** [Pump and Dump](https://finicade.com/glossary/pump-and-dump), [Liquidity](https://finicade.com/glossary/liquidity), [Delisting](https://finicade.com/glossary/delisting), [Small-Cap Stock](https://finicade.com/glossary/small-cap-stock), [Bid-Ask Spread](https://finicade.com/glossary/bid-ask-spread)

Source: https://finicade.com/glossary/penny-stock