Penny stocks are traded on________:
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A. B. C. D.D
Penny stocks are typically defined as stocks that trade for less than $5 per share, and are often associated with small, early-stage companies that are not listed on major stock exchanges. Instead, penny stocks are traded over-the-counter (OTC) through a network of dealers known as the OTC market.
The OTC market is a decentralized marketplace where securities are traded through a network of dealers rather than on a centralized exchange. This market is also known as the "pink sheets" because of the color of the paper on which quotes for these stocks used to be printed.
There are two primary OTC markets: OTCQX and OTCQB. OTCQX is the top tier, and requires companies to meet certain financial and regulatory requirements. OTCQB is the second tier, and is designed for early-stage and developing companies. Penny stocks typically trade on the OTCQB market.
To summarize, penny stocks are typically traded on the OTC market, specifically on the OTCQB tier. Therefore, the correct answer to the exam question is D. OTC.