Why do people avoid penny stocks?

[thandapani]

penny stock low price and company capital is less ,high risk this type of stock, liquidity also low ,

[Dinesh Kumar]

penny stocks are

–traded in low value

–low liquidity

–low demand and supply

which makes an individual difficult to follow its market and hence also beleived to be risky.

[S SUNDAR RAJAN]

High risk.

Occasional demand and supply. Highly unpredictable.

Risk of company closure and thus, total capital erosion.

Low liquidity.

[Ashw]

Easy manipulation and low liquidity.

[Leelakrishna]

A penny stock typically trades outside of the major market exchanges at a relatively low price and has a small market capitalisation.

These stocks are generally considered highly speculative and high risk because of their lack of liquidity, large bid-ask spreads.

[Author]

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