Penny stocks are any stocks that sells for less than $5 a share.
In North America most reputable brokerage firms require a deposit of $500 in order to open an account.
And fedeal and civil laws require an individual to be 18 years of age in order to open a brokeage account in their name. You can have a parent open a custodian account and when you turn 18 the assets in the account can be moved to an account in your name.
However, all this does not mean you should stop studying and/or preparing for making investments, nor should this prevent you from visiting the websites of the major brokeage firms so that you can get a feel for what services will be available to you when you once become a customer
Good luck on you journey, study well and you'll invest even better.
Penny stock does not really refer to the share price (well not totally). Basically when people say a penny stock they mean it is junk. Like not listed (OTC, BB), no SEC regulation. Probably no real business (try and find a balance sheet).
In UK we have a large national bank called Lloyds.Before the banking crisis the share price had been ￡10 and after the crisis i t has been about 30p (now 75P).
Surely there is no way you could have called this a 'penny share'.
Another way is to look at market capitalisation, or the value of a company according to the market. It will show you how big the company is or maybe how overvalued it is. Penny stocks may have millions of shares in issue. Look at the profit or potential profit and see how this relates to the mkt.cap.
As I say with a penny stock you are unlikely to get any reliable financial data anyway.
Most people define penny stocks as under $5. You are smart to avoid them.
Your small amount leads to a few problems.
1) Most brokerage accounts require a minimum that is more than $250.
2) Commissions are typically about $8 per trade (buy, sell). The smaller your trade, the larger the percentage that represents.
3) You also have to be 18 to have your own account as it requires legal age to sign a contract. You can have a custodial account with parental approval.
Here are 3 books that I always recommend for novice investors. Should be in any library.
One Up On Wall Street - Peter Lynch
A Random Walk Down Wall Street - Burton Malkiel
The Intelligent Investor - Benjamin Graham
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Well I'm 16 years old and really want to learn to invest. I know that I have to learn everything there is to know about trading and I won't be trading for a while. I have about 250$ to my name and want to know if buying a few 10$ shares would still be considered penny stocks because I know how risky those are and really don't want to. I also know I won't be making much trading such low amounts.
Im a rookie so please no insults. Also, any moderately known companies with not too expensive shares? THANKS
