Penny Stocks

Penny stocks are shares of small companies that trade for very low prices, usually under $5 per share. They’re often traded on smaller exchanges or over-the-counter, rather than on major stock exchanges like the NYSE or NASDAQ.

Because these stocks are so cheap, they can be very tempting for investors looking to make big gains on a small investment. However, they come with significant risks. Penny stocks are often from companies with limited financial resources or uncertain prospects, which can make them highly volatile. This means their prices can swing wildly, sometimes with little warning.

Additionally, penny stocks are less regulated than those on major exchanges, which can lead to a higher risk of fraud and manipulation. So, while there’s potential for big returns, investing in penny stocks requires careful research and a willingness to accept a higher level of risk.