Penny stocks, as the name suggests, are shares that are available at extremely cheap rates. Being available literally for pennies, you can purchase such stocks for as low as $2 per share. These stocks are usually of very small companies like Strategic Global Investments, Inc. (STBV), which have a market capitalization of less than $500 million. They are not traded at the major stock exchanges like NASDAQ or NYSE, but are listed in the pink sheets or the OTCBB (Over The Counter Bulletin Board), because these stocks are of companies chose not to fill out extra long form requirements. They are also referred to by other names such as pink sheet stocks, nano stocks, small caps, micro caps or juniors.
What a misnomer regarding penny stocks, “Penny stocks are not the kind of investments that a person should consider if he or she wants shares that slowly grow over several years.” You find major corporations listed in the penny stock market.