Penny stocks

Screening Filters

1. Price: 0.20 – 5.00 USD

   • Purpose: Capture stocks typically considered “penny stocks” by price.
   • Rationale:
     • The common U.S. definition of a penny stock is a stock trading below $5 per share.
     • Setting the maximum at $5 directly targets this range.
     • The minimum at $0.20 helps avoid ultra-low “sub-penny” names that tend to be extremely illiquid, highly manipulated, or prone to wide bid–ask spreads, while still including low-priced penny stocks.

2. Market Capitalization: 50M – 2B USD

   • Purpose: Focus on smaller companies that typically align with the “penny stock” profile while avoiding the most extreme micro/nano caps.
   • Rationale:
     • Penny stocks are usually smaller, more speculative companies, not large caps that temporarily dipped under $5.
     • A minimum of $50M removes the tiniest and riskiest micro-cap firms that can be very illiquid or opaque.
     • A maximum of $2B keeps the search in the small-cap space and out of mid/large caps that may occasionally trade below $5 but don’t fit the spirit of “penny stock.”

3. Monthly Average Dollar Volume: ≥ 200,000 USD

   • Purpose: Ensure a basic level of liquidity so the names are actually tradable.
   • Rationale:
     • Dollar volume = price × volume; setting a minimum of $200k per month filters out the most illiquid issues where getting in or out of a position might be very difficult or move the price significantly.
     • This balances the user’s interest in penny stocks with some practical trading considerations.

4. List Exchange: XNYS (NYSE), XNAS (NASDAQ), XASE (NYSE American/AMEX)

   • Purpose: Limit results to U.S.-listed stocks on major exchanges.
   • Rationale:
     • The user asked for “in the US stock market”; NYSE, NASDAQ, and NYSE American are the primary U.S. exchanges.
     • This excludes OTC/pink sheet securities, which are often much riskier, less transparent, and more thinly traded, while still matching the U.S. penny stock universe listed on major venues.

Why Results Match the Request

• The price cap of $5 aligns with the standard U.S. definition of a penny stock.
• The U.S. exchange filter ensures the stocks are actually part of the main U.S. stock market rather than foreign or OTC markets.
• The market-cap and liquidity filters refine the list to smaller but reasonably tradable companies, making the results more practical and relevant for an investor looking for U.S. penny stocks.