What are penny stocks?

Penny stocks are high-risk (sometimes illiquid) stocks with a market price typically below $5. They are typically very small companies and trade on over-the-counter markets.

Regardless of the type of penny stock you buy, you should always do so with an air of caution. Penny stocks should not make up any sizable portion of your portfolio and should be considered highly speculative. There is always a chance of significant returns, but due to the high-risk levels, investors should tread carefully. For more information, visit this page.