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A penny stock is a common stock trading at five (5) dollars or less. Penny stocks are traded outside the major markets (NYSE, AMEX, or NASDAQ). Instead, they are traded “over the counter” (OTC) via quotation services such as the OTC Bulletin Board and the “Pink Sheets.” Perhaps most importantly, penny stocks offer an incredible upside for potential investors. Penny stocks are sold at such low prices that they entice many investors, particularly first-time investors. These low prices allow novices to explore the markets, without risking an extensive amount of money.

The Advantages of Buying Penny Stocks | SmarterLifestyles

http://www.smarterlifestyles.com/2010/06/01/the-advantages-of-buying-penny-stocks/?fc_id=27698&fc_app_id=3027
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