Plain-English definitions, reviewed by an independent investor
Penny Stock
A penny stock trades at a very low price, often under a dollar, usually for tiny, speculative companies.
A penny stock trades at a very low price, often under a dollar, usually for tiny, speculative companies.
(Very low share price, usually sub-$1 or sub-$5)
Why it matters
It tempts with explosive upside from a small stake.
Common confusion
Thin trading, dilution, and scams make most penny stocks wealth destroyers.
Frequently Asked Questions
Why are penny stocks risky?
Low liquidity, weak disclosures, and frequent dilution or promotion.
Can penny stocks make money?
Rarely and unpredictably; treat them as lottery tickets, not investing.