Penny Stocks are low-priced stocks. There is no formal definition.
Stocks that sell for less than $5 or their net tangible assets are less than 2
million dollars are considered as penny stocks. In India stocks under a price
of Rs 50 are penny stocks.
The appeal of penny stocks comes from its low price as
also investor’s psychology. Investors tend to think that a stock quoting Rs 10
rising to 20 is more possible than a stock quoting Rs 2700 growing to Rs 5400.
If the fortune of the penny stock company turns around there is plentiful of
opportunity to see share price appreciation. Penny stocks are popular among speculators.
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