May 30, 2012

Posted by in Penny Stock | 0 Comments

NYSE Penny Stocks Offer Low Risk, High Yield

NYSE penny stocks are sold for less than $5 per share. Penny stocks are low priced securities sold by small businesses. Also known as micro-cap stocks, capitalization is less than 5 million dollars. Technically, under federal securities laws, penny stocks are not listed on either Nasdaq or any national securities exchange. Reality tells a different story because there are plenty of stocks listed on all exchanges that sell for less than $5.00 a share.

Disallowing NYSE Penny Stocks

You may wonder why the Federal Securities and Exchange Commission  (SEC) disallowed NYSE penny stocks. When the SEC adopted the $5 threshold it gave three reasons:

•    the belief that stocks with higher values were more difficult to manipulate
•    to conform with state registration for companies raising less than $1 million
•    the perception that small business could still raise capital

The SEC does not use the term penny stock or micro cap, but does state that stocks listed at under $5 per share should not be listed on national any national stock exchange.

NYSE Penny Stocks Listing Requirements

For a company to be listed on the NYSE it is expected that it will keep the investing public well informed of its activities. Furthermore, the company must be performing at a level where it can cover its costs and make a profit. When considering the listing of a business such matters as the amount of national interest there is in the business, its relative position within its industry, and whether it is expanding or not. All company stocks, including NYSE penny stocks, are subject to the same listing requirements.

There are many good reasons to invest in penny stocks. They enable people to explore the marketing without risking a great deal of money.  They are sold as common shares, and are therefore easy to purchase. Additionally, they have excellent potential, and can sometimes yielding double or triple their original value. When all is said and done, NYSE penny stocks are a relatively low risk with terrific earning potential. Although choosing the right penny stock may seem daunting plenty of help is available online.

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