What Are Penny Stocks?
Penny stocks are sub $1.00 stocks that are extremely high risk. They are usually stocks with no earnings and quarter after quarter they lose money. These companies trade around $1.00 for the obvious reasons, poor fundamentals and a lack of clarity on their future. Bankruptcy is always possible as they continue to lose money. While extremely high risk, penny stocks do offer the potential for huge gains. Many investors will buy these plays on hopes and dreams of hitting the next big thing. More astute investors shy away from them as they are aware that only a few will survive while the others will continue to trade lower. There are a few Hidden Gems out there!
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