This is the name typically given to the shares of small high risk firms.
This is the name typically given to the shares of small high risk firms.
Sometimes their share price may only be a few pence – hence the name – but this isn’t a requirement to be classified as a penny share. As a rule of thumb if the bid to offer spread (the gap between the buying and selling price for the share) is 10% or more and the share price is less than 50p the label penny stock is often used. Investors should note that these shares are often difficult to trade and highly volatile.
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