Jump to content
AskTraders Trading Community
  • 0

What are Penny stocks?


Alexander Richards

Question

1 answer to this question

Recommended Posts

  • 0

Hello, thank you for asking! 

Penny stocks refer to the stocks offered for less than $5 per share. They are usually not traded on large stock exchanges, but only on some medium and smaller platforms. Because of this, and their association with smaller companies, and low value, it is sometimes hard to find buyers for penny stocks, therefore low liquidity is the main attribute of Penny stocks. 

They are considered highly speculative so only investors with high-risk tolerance should be investing in them, as they can reap great profits, but can also generate high losses. There are several reasons for such high risk and low liquidity of penny stocks, these are lack of information available to the public, no minimum standards, lack of history, low liquidity, and a high number of frauds related to them.
 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. To reply to this question, sign in or create a new account.

Guest
Reply to this question

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...