What Are Penny Stock Symbols?
Penny stocks or small cap stocks get a bad reputation because they are cheap and volatile. However, much of the problem is that investors are unfamiliar with the stocks trading in the penny markets. Unlike the mainstream markets, penny stock symbols are largely unknown. A little understanding of the penny stock symbol and its composition may make the stocks more approachable to a wider range of investors.
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Components
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A penny stock symbol consists of a shorthand version of the company name in the form of a four letter symbol. The penny stock, Asia Electrical Power International Group becomes AEPW on the stock ticker. Some of the symbols consist of more than 4 letters. These additional letters convey important information about the penny stock. They always appear after the 4-letter company name in shorthand. The Diamant Art Company, for example, has a symbol DIAAF. The DIAA part of the symbol represents the company name. The F symbol tells investors that this company is a foreign security.
Types of Fifth Symbols
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The fifth informational identifier symbol is designated by a specific letter of the alphabet, with every letter from A to Z designating some sort of identifier. The A identifier stands for a class penny stock, while Q symbol designates a company in bankruptcy and the E symbols identifies a penny stock company that is delinquent on its SEC filings. See the Resources section for a link to the full list of fifth symbol identifiers and their meanings.
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Symbol Location
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Locating a penny stock company by its symbol or its full company name is easily done. The Over the Counter Bulletin Board (OTCBB) is the best place to find information from either source. Its symbol directory can locate your penny stock by its full company name or by the symbol used on the ticker. Pink Sheets is also a reliable source on penny stock information that is easy to access. Both sites can also provide vital information about your penny stock.
History
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All stock symbols originated in the 1800s when the telegraph was used to transmit stock information to the investors. Company names were much too long to transmit in full, so a short hand was created to distinguish one company from another. The oldest stock market is the New York Stock Exchange. The stocks traded here were given 2 letter symbols, 1 letter for those heavily traded. As other exchanges like the NASDAQ and AMEX arose, stocks traded on them were given 1 extra letter.
Thus the 4-letter penny stock was the last frontier. So, by looking at company symbols such as Ford (F) and Microsoft (MSFT), you can not only tell what the company is, but how long the stock has been trading. In Ford's case, the single letter symbol denotes a very long time in the markets.
Outside of the Open Market
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You can not find information on your penny stocks in the daily newspapers, financial search engines or even the financial new channels like CNBC. Penny stocks are simply not listed on the open market. Instead, you must go where to sources set up specifically for stocks. Those are the Pink Sheets and the OTCBB.
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