Have you ever wanted to learn to trade Penny Stocks? Now is your chance. Understanding Penny Stocks starts from the very beginning. For the purposes of understanding Penny Stocks, I will treat any share that trades under $2.00 as a penny stock. Strangely, there is no official definition for penny stocks. There are three different criteria that various individuals and organizations use to define penny stocks. What is considered a penny stock really depends with whom you are dealing.