Over The Counter Stocks, or OTC stocks, are stocks that have very low market capitalization. Thus, they will not be able to comply with the regulations laid down by the Securities and Exchange Commission (SEC) to be listed on stock exchanges.

You probably went into penny stocks investment because a friend of yours hit it big time. Or a relative who recently doubled his assets wouldn't stop talking about penny stocks during your last reunion that you just had to check it out.

Penny stocks are low-priced common stocks of relatively small companies. These stocks trade at less than $5 per share and are usually highly volatile. While penny stocks are commonly defined as stocks that are traded outside any of the major stock exchanges, i.e. NYSE, NASDAQ, or AMEX, the official definition from the SEC is a little broader.

Most penny stocks are traded by a group of brokers or brokerage firms that are also market makers, so it's easy for them to manipulate share prices. When these firms acquire a large number of shares at a low price, they can create an artificial demand to drive up the price.

A stock or share of a company represents a unit of co-ownership of the company. Any individual owning a stock or share of a particular company is a co-owner of the company, and he or she has all the rights and privileges such as voting.

If you are a person who has decided to invest in penny stocks, then you would find the Pink Sheets and the Over The Counter Bulletin Board (OTCBB) most useful. Both of these can be found online at their respective websites, and both are real-time electronic stock quotations.

Penny Stocks are stocks that have a very low value and are traded outside of the formal stock exchanges. They are mostly traded over the counter on the Over The Counter Bulletin Board (OTCBB) and the Pink Sheets. Also, they are characterized by very thin volume.

More people are inclined towards buying and trading penny stocks rather than regularly traded stocks because it is deemed as a cheaper option. Also, the easiness of entering the penny stocks market is attracting more investors

Penny stocks are one of the many ways of investing your money with the intent of making a profit. Compared with stocks on the major stock exchange boards, penny stocks are low priced, allowing you to purchase bigger volumes at a much cheaper price.

Penny stocks are classified as shares that are traded at $2 or below. The SEC (Security and Exchange Commission) still considers any stocks up to $5 as penny stocks, although this price is really close to the price of numerous mainstream stocks.