Penny stock

Screening Filters

1. Price: 0.5 – 5 USD

   • Purpose: Capture stocks generally considered “penny stocks” while avoiding ultra‐illiquid sub‑penny names.
   • Rationale: In the U.S., a common definition of a penny stock is any stock trading under $5. Setting the max at $5 lines up directly with this. The $0.50 minimum helps filter out extremely low‑priced, often highly illiquid or distressed securities that are harder to trade and much riskier from a practical standpoint.

2. Market Capitalization: $100M – $1B

   • Purpose: Focus on smaller companies, typical of penny stocks, while excluding micro/nano caps that may be too speculative or illiquid.
   • Rationale: Penny stocks are usually associated with smaller businesses. A cap of under $1B ensures we are not pulling in large, established companies that just happen to be temporarily under $5. The $100M floor helps avoid the very smallest, often OTC‑style names that can be extremely volatile and easily manipulated.

3. Monthly Average Dollar Volume: ≥ $1,000,000

   • Purpose: Ensure a minimum level of liquidity so the names are actually tradable.
   • Rationale: Many penny stocks trade tiny volumes, which can make entering or exiting positions difficult and widen bid‑ask spreads. Requiring at least $1M traded per month (price × volume) screens for penny stocks that have enough activity to be more practically investable or tradable.

4. Moving Average Relationship: PriceAboveMA20

   • Purpose: Bias the results toward penny stocks showing short‑term upward momentum or strength.
   • Rationale: Price above the 20‑day moving average is a simple technical condition suggesting the stock is in a short‑term uptrend or at least not in a severe immediate downtrend. For penny stocks, this can help filter out names that are collapsing and highlight those that are performing relatively better.

5. 1‑Month Price Change %: ≥ 25%

   • Purpose: Isolate penny stocks with strong recent performance.
   • Rationale: A gain of at least 25% over the last month is a sign of notable positive momentum or a significant recent catalyst. Since many people look at penny stocks for big moves, this filter focuses on names that have already demonstrated strong short‑term price action rather than stagnant or consistently declining issues.

6. Region: United States

   • Purpose: Limit results to U.S. companies/markets.
   • Rationale: The user’s request “penny stock” is most commonly associated with U.S. market terminology and regulation. Restricting to the U.S. keeps the list consistent with that definition and avoids mixing in foreign tickers with different rules or liquidity profiles.

7. Exchange Listing: XNYS, XNAS, XASE (NYSE, NASDAQ, NYSE American)

   • Purpose: Focus on U.S. exchange‑listed penny stocks rather than OTC or pink sheet names.
   • Rationale: Many penny stocks trade OTC, where reporting standards and liquidity can be weaker. By limiting to major U.S. exchanges, the screen targets penny‑price stocks that still meet higher listing standards, making them relatively more transparent and tradable.

Why Results Match “Penny Stock”:

• The price filter (≤ $5) directly aligns with the standard U.S. definition of a penny stock.
• The market cap and liquidity filters (cap $100M–$1B, ≥ $1M monthly dollar volume) keep the focus on smaller, lower‑priced companies that still have enough trading activity to be actionable.
• The technical filters (PriceAboveMA20, ≥ 25% 1‑month gain) refine the universe to penny stocks that are currently showing strength, which is often what users are seeking when they ask for penny stocks to look at.
• The U.S. region and major exchange limits ensure you’re seeing U.S.‑style penny stocks listed on recognized exchanges, not illiquid or opaque OTC names.