These are very small public companies, and only a few hundred or few thousand shares of stock may trade hands in a single day. In nearly every case, penny stocks are penny stocks because they've had a miserable life as a public company. Penny stocks are the remnants of the stock market, and while some of these companies may claw their way back to the top, many will languish and ultimately die. Most penny stocks don't qualify, so you can't buy and sell these stocks on a major exchange. But since these stocks have few people who are buying and selling them, their prices can be extremely volatile, with wide spreads between the bid and ask prices.
Some investors specialize in penny stocks.
Typically, these are aggressive individuals who are willing to speculate, and can tolerate huge losses. Most sensible investors will stay away from penny stocks altogether. By using this site, you agree to our Terms of Service . Your privacy is important to us. For information, please read our Privacy Policy .