Penny stocks are low-priced securities that usually trade at below five dollars a share. It does happen that these stocks fall from much higher prices to trade thinly with low volume. These days, penny stocks are no longer listed on the top stock exchanges. Nowadays they are traded on OTCBB or Pink Sheets. What this means is that shares traded OTC are usually the more smaller riskier stocks and do not meet the standards required to be listed on the stock exchange. Because there aren’t any traders around ready to buy or sell these unlisted securities, brokers or dealers normally negotiate amongst themselves on the phone or internet. With penny stocks, a speculator could purchase a huge number of shares with quite a small amount of money. He hopes to receive a quick surge in his penny stock which will give him a good deal of money on his initial investment. If he has the strategy for trading penny stocks, he can become very successful, but the odds aren’t really in his favour.