Penny Stock
A penny stock is a very low priced, specualtive share that ofen trades for less than $1.
Quick Reference:
Under $1. High Risk. Low liquidity. prone to hype.
Expanded Explanation:
Penny stocks are small, often unproven companies with limited financial history. Their low price can make them seem attractive, but it does not mean they are cheap in value. They are usually thinly traded, even small orders can cause big price swings. These stocks are often promoted with hype and can be targets for pump and dump schemes. Whilst it is possible a few may grow into successful companies, most never deliver strong long term returns. They can be tempting, but they carry far more risk than established companies.