Penny stocks

Screening Filters

1. Price: max $5

   • Purpose: Capture low-priced stocks.
   • Rationale: “Penny stocks” are commonly understood as stocks trading under $5 per share. This is the most direct filter for the user’s request.

2. Market Cap: min $50M, max $3B

   • Purpose: Focus on smaller companies rather than large, established blue chips.
   • Rationale: Penny stocks are often associated with small- to mid-sized companies. Setting a lower market cap floor helps avoid extremely tiny, illiquid shells, while the upper cap keeps the screen in the smaller-company universe typically associated with penny-stock behavior.

3. Monthly Average Dollar Volume: min $150,000

   • Purpose: Ensure the stocks have some trading liquidity.
   • Rationale: Many penny stocks are very thinly traded, which can make them hard to buy or sell efficiently. This filter helps exclude the most illiquid names and improves the practical usefulness of the screen.

4. Relative Vol: min 1.0

   • Purpose: Select stocks showing at least normal or above-normal trading activity.
   • Rationale: Relative volume measures whether a stock is trading more actively than usual. Penny stocks often move on news or speculation, so higher relative volume can help identify names that are currently attracting attention.

5. New High/Low: 52w Low

   • Purpose: Find stocks trading near their lowest levels over the past year.
   • Rationale: This is useful for identifying beaten-down penny stocks, which are often the type users mean when they ask for penny stocks. It can also highlight potentially oversold names, though it may include higher-risk companies.

Why Results Match:

• The price cap under $5 directly targets penny stocks.
• The market cap range narrows the search to smaller companies that fit the usual penny-stock profile.
• The liquidity filters help remove extremely thinly traded names that are difficult to trade in practice.
• The relative volume filter increases the chance of finding active penny stocks with current market interest.
• The 52-week low filter favors lower-priced, distressed, or heavily sold-off stocks, which are often common in penny-stock screens.

Together, these filters produce a more practical and relevant penny-stock list: low-priced, smaller companies that are actively traded and currently trading near their lows.