Penny stocks

Screening Filters

1. Price: $1–$5

   • Purpose: Capture lower-priced “penny stock–like” shares while excluding ultra‑illiquid sub‑$1 names.
   • Rationale: In U.S. markets, “penny stocks” are commonly thought of as stocks trading under $5. Setting the upper bound at $5 aligns with that definition. Using a $1 minimum avoids the most speculative, thinly traded OTC‑style names (often below $1) that are much harder to analyze and trade safely.

2. Market Cap: $100M – $1B

   • Purpose: Focus on smaller companies while avoiding extremely tiny microcaps.
   • Rationale: Penny stocks are typically small-cap or microcap firms. A $100M–$1B range keeps us in the “small and speculative” universe, but filters out the very smallest companies (below ~$100M) where disclosure, liquidity, and volatility risks can be extreme and information is often poor.

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

   • Purpose: Ensure a minimum level of trading liquidity.
   • Rationale: Many penny stocks are very illiquid, making it hard to enter or exit positions without large price impact. A $1M+ average monthly dollar volume threshold helps you see penny‑range stocks that trade enough value to be realistically investable or tradable.

4. 1‑Month Price Change: ≥ +15%

   • Purpose: Highlight penny stocks that are already showing notable recent momentum.
   • Rationale: Within the penny stock universe, many names are stagnant or in long‑term decline. A requirement of at least +15% over the last month focuses on those currently attracting interest and upward price movement, which many users look for when asking about penny stocks to watch.

5. Exchange Listing: XNYS, XNAS, XASE (NYSE, Nasdaq, NYSE American)

   • Purpose: Limit results to U.S. major exchanges.
   • Rationale: You asked for U.S. stock market penny stocks. Restricting to NYSE, Nasdaq, and NYSE American excludes OTC and pink‑sheet listings, which often pose higher regulatory and disclosure risks, and keeps the list to more regulated U.S. venues that most brokers support.

6. Short Ratio: Less Than 10%

   • Purpose: Filter out stocks with extremely high short interest.
   • Rationale: Many penny stocks with very high short interest are viewed by the market as highly vulnerable or fundamentally weak. Keeping short interest under 10% reduces exposure to names the market is heavily betting against, aiming for a slightly “higher quality” subset within penny‑type stocks.

Why Results Match:

• The price cap at $5 directly implements the standard definition of penny stocks in the U.S. market.
• U.S. exchange filters (NYSE/Nasdaq/NYSE American) ensure the stocks are indeed part of the U.S. stock market and meet basic listing standards.
• Market cap and liquidity constraints keep you in the smaller, more speculative space typical of penny stocks, but avoid the most illiquid, riskiest microcaps.
• Momentum and moderate short interest refine the list toward names that are actively traded and not overwhelmingly shorted, making them more practical candidates to research.