Why do people avoid penny stocks?

[Shantanu]

very low margin can be gained out of penny stocks.

[satish katwate]

very low volume. stronger hand easily manipulate the stock.

[Arun Kanderi Ramachandran]

Even though penny stocks are traded at low price , they are volatile in nature and percentage of risk is higher and

more probability of price manipulation.

[prprasad]

volume of those stocks traded are low so there is risk of liquidity,better to avoid it.

[AMARNATH]

<span style=”font-weight: bold; color: #6a6a6a; font-family: arial, sans-serif; font-size: small;”>Penny stocks</span><span style=”color: #545454; font-family: arial, sans-serif; font-size: small;”> come with high risks and the potential for extraordinary returns, so investing in them requires care and caution. </span><span style=”font-weight: bold; color: #6a6a6a; font-family: arial, sans-serif; font-size: small;”>Penny stock</span><span style=”color: #545454; font-family: arial, sans-serif; font-size: small;”> companies are often headed for bankruptcy or are highly overleveraged, because of that investing in </span><span style=”font-weight: bold; color: #6a6a6a; font-family: arial, sans-serif; font-size: small;”>penny stocks</span><span style=”color: #545454; font-family: arial, sans-serif; font-size: small;”> is risky.</span>

[Author]

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