Call: 0123456789 | Email: info@example.com

Hello everyone welcome to our must know list of penny stock terminology defined in everyday language

Hello everyone welcome to our must know list of penny stock terminology defined in everyday language


1.The Ask – The price someone is willing to sell their shares for

2.The Bid – The price someone is willing to buy the shares for

3.The Size– The amount of shares someone wants to sell or buy

4.The Market Maker ( MPID)- The broker who makes the transaction for us..on level 2 screen it looks like this

 NITE (mm)   5,000(size)  .16(bid)       .17(ask)   5,000    ATDF(mm)

So market maker NITE (4 letter initial of firm name) is willing to buy 5,000 shares(or more because they are not required to show the actual size over 5k) for 16 cents.

Market maker(ATFD-ameritrade) wants to sell 5,000 shares( or more) for 17 cents.

5. The Spread–  the difference between the Bid and Ask ..as in the above example .. 1 cent on this execution

6. Volume – The amount of shares trading hands each day.. buy and sell

7. Level 2 – subscribe to it on your online discount broker site if you haven’t yet ..it allows you to see bid/ask/size as the mm’s buy and sell in real time. You’ll see the bids and asks stacking and you will Learn and Earn.

8. Time and Sales-  gives you the time the trade was executed ..the size(amount of shares traded) and the price..It’s important to see the sizes because in the penny stock world the mm’s,bigboys,insiders will print small  sizes to get the price going up..traders on level 1 only see the last price which often times is deceiving.

9. The Gap up-  In penny stocks you will often see a significant price increase or decrease from the close to next day open without any trades being executed. Ex. ABCD closes on monday at .10 then monday night or before the bell tuesday ABCD comes out with great news or it getting promoted or both…well..people don’t want to miss it so they start putting in pre market orders which make the price GAP UP…so now it opens at .12 … a 2 cent gap ….this is great for sellers ..but buyers beware of the GAP UP!

10. Liquidity- when the stock is trading with huge volume it is said to be liquid (easy to get in and out of)…in the pennies be careful if the stock is not liquid you won’t be able to sell out of it.

11. The Float- The total number of shares available or “in the market” that can be traded..the float is very important ..low float = volatility (chances for big gains and losses)

12. Outstanding shares- The amount of tradable shares in the market(the float) plus the restricted shares held by the company insiders that can’t be sold until a certain date.

13. Market order- when you place a market order it will guarantee that your buy or sell order will get filled…but at what price? (the best price). But that might not be the price you wanted. You can use market orders on stocks that trade with high volume.(like google or apple)..be careful in the pennies!

14. Limit order-  Now your talking!  a limit order allows you to set the price  you want to buy or sell your stock…. or a better price if it goes up or down before it gets filled. You can also limit the time til cancelled. You use limit orders on low volume highly volatile stocks(pennies).

15. Shorting- your betting on the stock to go down…you have a broker(if you can find one) that will let you borrow from his account or someone else’s at a certain price (let’s say 100 shares at .50 cents)..he sells them for you and you get $50 bucks in your account. But now you have to get those 100 shares back to the broker. So you have to buy 100 shares in the open market. If you buy the 100 shares back (cover)at .10 cents that’s only $10 bucks..so you made $40 bucks and returned the 100 shares to your broker. Done!  NOT SO FAST BUDDY…it is very difficult to find a broker that will short penny stocks…plus you’ll need a lot of money in your margin account. And you won’t be able to borrow enough shares to hold a significant position to make it worth it..BOTTOMLINE. Most people outside of the market makers don’t short penny stocks.

penny stock terminology

16. Market Capitalization- (market cap)- since this is pennyland we deal with small cap stocks. Under 1 or 2 billion dollars depends who you talk to. What we mean by that is the outstanding shares(see above for definition) multiplied by the current share price. So pick your favorite penny stock, go to their investors website, check out their outstanding shares number which could be written as total issued or total outstanding ..then do the math. Is the company your investing in worth that much?  In the pennies the companies are usually way overvalued ….but who cares ..as long as there are people willing to buy and sell (usually because of big news or a promo)… whatever the reason …you can make money!

17. OTC minimum quotation tier structure (the size-or amount of shares the market makers have to display on level 2) currently it is 0 to 50 cents they have to show 5,000 shares minimum..51 cents to a dollar 2,500…1.01 to ten bucks 500 ..that’s all we need for the pennies.

18. NEW OTC minimum quotation tier structure beginning November 5, 2012 is …0001 to .0999 (0-10 cents) they now must show 10,000 ..little bump up but will make no difference because 10,000 shares at under 10 cents is nothing ..market makers will still hide and glide. Next is 10 cents to 20 cents they show 5,000 (no change at these levels).. then 20 cents to 50 cents minimum drops to 2,500(these will be stacking up) then 50 cents to a dollar only 1,000 minimum(less than current) then one dollar to 175 dollars they must show at least 100.

19. DTC Chill- The depository trust and clearing corporation imposes trading restrictions on brokers due to regulatory, compliance or other issues with the security. In layman’s terms ..the DTC halts electronic transfer of stocks. Since every trade is done electronically ..the stock basically stops trading. They do this in the pennies because of individuals manipulating the stock, announcing false company news(lying), issuing illegal shares etc. (dirty business practices). What a headache for the company and the shareholders as it takes many months to get cleared.

RSS Stock Market

  • Discovery Gold Corp (OTCMKTS: DCGD) Continues to look bullish October 29, 2019
    #pennystocks Discovery Gold Corp (OTCMKTS: DCGD) Continues to Show Bullish Bias Among the cannabis stocks, Discovery Gold Corp (OTCMKTS: DCGD) is continuing with a bullish bias and is showing comparatively more strength. After a slightly turbulent summer, with some controversial news reports, the company has now restructured its board of directors and added a cannabis industry […]
  • Penny stocks to watch 2019 October 24, 2019
    #pennystocks Welcome to our help page on  penny stocks. On this page you will find a list monthly penny stocks to watch. A lot of people broadly define penny stocks as any stocks that are traded under $5. The average person most likely considers a penny stock to be a stock that trades under $1 […]
  • One of the funniest PRs ever October 22, 2019
    #pennystocks This is a Gem we came across on Twitter it was an actual PR submitted to OTC markets. Disclaimer: The PR made us laugh so we bought 15,000 shares of the company just for the fun of it. Probably the most honest PR you will ever see. FORM 8-K CURRENT REPORT Pursuant to Section […]
  • Marijuana Penny Stocks that could go up 1,000% October 22, 2019
    #pennystocks  (adsbygoogle = window.adsbygoogle || []).push({ google_ad_client: "ca-pub-6523535344142288", enable_page_level_ads: true }); Marijuana Penny Stocks Marijuana stocks have started getting main stream attention. You can see “experts” on TV talking about them on their financial news stations. Is it all just hype? The truth is many marijuana penny stocks are scams or desperate companies who […]
  • Gold Stock October 14, 2019
    #pennystocks Gold Stocks Many experts believe the timing is right to invest in gold stocks. Gold stocks are starting to heat up and 2019 could be a huge year! Make sure you join our free stock newsletter to keep up to date on all the stocks. There are several choices for investing in gold stocks […]
  • teacup pig September 2, 2019
    #pennystocks Teacup pigs Question and Answers Teacup pigs have been a growing trend in the united states over the last several years. Some pet owners believe they make better pets than dogs or cats. There is a lot of information and misinformation out there about teacup pigs. So we dug in and have done a […]
  • Day Trading September 2, 2019
    #pennystocks 12 Mistakes that will make you awful at day trading Hey, we’ll be the first to admit it. It’s pretty easy to screw up day trading if you have no clue what you’re doing. However, there is also a lot of good that can come from becoming a good trader. So, how do you […]
  • Moller Skycar_ The Future of Transportation July 17, 2019
    #pennystocks The Future of Transportation has Arrived! Ticker Symbol: MLER Skycars are the future. As a world, we have evolved from numerous ways of transportation ranging from walking, horseback riding, and eventually automobiles. Imagine opening your garage, putting your skycar in reverse, and taking off VTOL into the beautiful blue skies. No more traffic accidents, […]
  • Bitcoin Stocks to watch for 2019 July 15, 2019
    #pennystocks Bitcoin Stocks   So what’s the deal between bitcoins and penny stocks? Well, originally the two were not connected in any way whatsoever. However, penny stocks soon became the obvious place for investors to gravitate. As it turns out, they did more or less stampede the world of penny stocks in much the same […]
  • Warrior Trading July 9, 2019
    #pennystocks Warrior Trading Ross Cameron is the man behind Warrior Trading. It is basically a chat room and trading education service. Teaching students about how to Day Trade Momentum Strategies is the main purpose of this chat room. Warrior Trading is partners with Bloomberg, Huffpost, Interactive Brokers, Benzinga, Lightspeed, eSignal and Trade-Ideas. The motto of […]