What do you know about a penny stock? For one thing this kind of stock trades at relatively low price and even lower capitalization.
If you are looking to trading these stocks you will find them outside of the big market exchanges such as over the counter OTCBB and pink sheet. Now what about risk? Generally speaking they are highly speculative, this higher risk is attributed to their lack of company liquidity.
The other factors to consider is the large bid spread and the lack of following or even disclosure. Penny stocks are those that usually priced under five dollars. The pricing provide for an investor to purchase more shares with a potentially larger profit if there is a upside. Conversely the opposite is true if the stock fall. Take a look at this article: Spotting Sharks Among Penny Stocks
Catching a lift on penny express
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