peeny stocks?

Definitive answer: Penny stocks are small company's stock that trade for less than $5 per share and trade via over-the-counter (OTC) transactions. They are often highly volatile and have low liquidity, which makes them a high-risk investment. Penny stocks are usually associated with small companies with a lack of liquidity, meaning that there are few ready buyers in the marketplace. As a result, investors may find it difficult to sell stock since there may not be enough buyers. Due to their low liquidity, wide bid-ask spreads or price quotes, and small company sizes, penny stocks are generally considered highly speculative. In other words, investors could lose a sizable amount or all of their investment. Penny Stock Volatility Penny stocks often represent growing companies with limited cash and resources. Since these are primarily small companies, penny stocks are most suitable for investors who have a high tolerance for risk. Typically, penny stocks have a higher level of volatility, resulting in a higher potential for reward and, thus, a higher level of inherent risk. Investors may lose their entire investment on a penny stock, or more than their investment if they buy on margin, which means borrowing money to purchase the stock.