What are penny stocks?

Penny stocks today: The widely accepted definition of penny stocks has been somewhat extended to cover other, higher-priced stocks which also trade in less-regulated, over-the-counter markets.

Over-the-counter stocks are generally less liquid, and they have fewer requirements to remain listed. Many don’t even file financial reports on time, or at all. And they’re often managed by people with a less-than-stellar pedigree.

Related: Amazon is a Money Pit, Not a Cash Flow Machine

Jordan Wathen is a value investor who writes for The Motley Fool. The views expressed here are his own.

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