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Usually when you think of commercial stocks, the major stock exchanges may come to mind as the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations (NASDAQ), and the American Stock Exchange ( AMEX). Penny stock is a cheap way for a very small company with a market capitalization of less than $ 500 million and trade in general in very small volumes. Penny stocks also trade on other “other the counter” exchanges like the OTCBB and Pink Sheets. Due to low trading volumes, penny stocks are an investment option that comes with a significant amount of risk. According to the Securities and Exchange Commission, potential investors in penny stocks should be aware that due to low trading volume of these stocks, it is possible that investors will not find a buyer for their actions. Find specific quotations are also difficult fiat currency making it a strong possibility that the investor can lose their entire investment. “Penny stocks” does have some appeal for many types of investors. Chances are, however, a new investor looking for a potentially lucrative investments with a low price at the start will take place through the penny stock. The attraction is that, at such low prices any changes are often measurable in hundreds of percent in a given day or two. Value of stock an investor can literally become worth double or even triple the amount of initial investment. Conversely, the price of a penny stock can drop in value just as quickly. New and inexperienced investors would do well to avoid making penny stocks a major part of their investment portfolio. Also due to the listing requirements on exchanges like OCTBB low and the Pink Sheets, many companies should not be regarded as safe investments.