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What is penny stock

A penny stock typically refers to a stock that trades for less than $5 per share. This type of stock normally has high price fluctuation, low liquidity, and a higher chance of delisting. Normally we do not suggest public investors trade penny stocks.


1. How to trade penny stocks in the US

Penny stock is a type of stock, and its trading process, trading hours, and order types are the same as those of common stock.

Warm reminder: Because of the high risk, if it is your first time to trade penny stocks, you need to confirm the risk disclosure before you can trade them.


2. If a stock’s price falls below $5, can it be traded

When the price of US stocks falls below $5, they are considered penny stocks. If you open new positions in these US stocks, you need to confirm the risk, but there are no restrictions on closing positions.


3. Do penny stocks support short selling

Generally, short selling of penny stocks is not restricted. Please note that, from the perspective of risk management, Moomoo Financial Inc.may adjust the short-selling limits and short margin rates of some penny stocks from time to time.


4. What are the risks of penny stocks

Since there is no daily price limit on US stocks, prices of penny stocks may fluctuate greatly within a day.

Penny stocks lack a liquid market with low trading volume, and thus have high liquidity risk.

The delisting risk of penny stocks is greater than that of common stocks.

Moomoo is a professional trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.

Any illustrations, scenarios, or specific securities referenced herein are strictly for illustrative purposes. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal.