Penny stocks

Screening Filters

1. Market Capitalization: 300M–2B USD

   • Purpose: Focus on smaller U.S. companies that are still of a meaningful size.
   • Rationale:
     • “Penny stocks” are typically associated with smaller, more speculative companies.
     • Setting market cap between $300 million and $2 billion targets small-cap names (and upper micro-cap), which are far more likely to trade in the penny-stock price range than large blue-chip companies.
     • The lower bound ($300M) avoids the very smallest, often extremely illiquid or distressed companies, which can be difficult to trade and very risky.

2. Share Price: 1–5 USD

   • Purpose: Directly capture U.S. stocks that fall into a practical definition of “penny stocks.”
   • Rationale:
     • In U.S. markets, “penny stock” is commonly used for low-priced shares. While the strict regulatory definition often uses <$5, traders colloquially think of very low-priced shares, often under a few dollars.
     • Using $1–$5 focuses on low-priced stocks that most investors call “penny stocks” while excluding sub-$1 “ultra-pennies,” which tend to be highly illiquid and more prone to extreme manipulation.

3. Monthly Average Dollar Volume: ≥ 2,000,000 USD

   • Purpose: Ensure the penny stocks are reasonably liquid and tradable.
   • Rationale:
     • Many penny stocks trade very little volume, which leads to wide bid–ask spreads and difficulty entering or exiting positions without heavy slippage.
     • Requiring at least $2M of average dollar volume per month filters out the most illiquid, inactive names and keeps the list more practical for real trading or research.

4. 1-Month Price Change: ≥ +25%

   • Purpose: Highlight penny stocks that have had notable recent price movement.
   • Rationale:
     • The user didn’t explicitly ask for “momentum” or “movers,” but a common implicit interest in penny stocks is finding names that are “doing something” rather than completely stagnant.
     • A minimum of +25% in the past month surfaces stocks that have had a meaningful recent move, indicating active interest or news flow, while still just being a filter on past performance (not a guarantee of future gains).

5. Exchange Listing: XNYS, XNAS, XASE (NYSE, NASDAQ, AMEX)

   • Purpose: Limit results to penny stocks on major U.S. exchanges.
   • Rationale:
     • The question specifies the U.S. stock market, and these are the primary U.S. listed exchanges.
     • This excludes OTC (over-the-counter) stocks, where many of the riskiest penny stocks reside, and focuses on companies that meet the listing standards of a national exchange (reporting, minimum price, governance, etc.).

Why Results Match:

• The price filter ($1–$5) directly targets what most market participants consider “penny stocks.”
• The U.S. exchange filter (NYSE/NASDAQ/AMEX) ensures the names are part of the mainstream U.S. stock market, aligning with your request.
• The market cap and liquidity filters keep the list focused on smaller, but not extremely distressed or untradable companies, making the resulting penny stocks more practical to analyze and trade.
• The recent performance filter (+25% in 1 month) emphasizes actively moving penny stocks, which are often of greater interest to investors and traders seeking ideas in this space.