Why do people avoid penny stocks?

[Abhishek Singhvi]

Less Market capitalisation.
The volume traded with respect to this shares is generally less.
Chances of insider trading is high.
Fraud risk factors are high.
High risk stocks

[prabhaker]

low cost, less demand and supply, high risk of loss- as there is no market stability

[Jyothirmayee]

Because of high risk and low liquidity .

[Shashank Vemuri]

The traded volume is low, and many top companies and investors do not monitor the company reports which may lead to any malpractice. The involved is high and very low liquidity.

[R . Vinay Kumar]

Penny stocks have very low trade volume and liquidity. They can be easily manipulated by stronger hands.

[Author]

Posts