Regular stocks are described as those that trade for more than $5 per share, whereas penny stocks are generally characterized as shares that trade for less than $5 per share. These two categories of stocks differ from one another in a few significant ways.
To start with, penny stocks are typically far more volatile than ordinary stocks. This implies that their value can fluctuate quickly and without warning. This could be advantageous if you believe the stock’s value will rise, but it could also be detrimental if the stock’s value falls.
Another distinction is that penny stocks are typically not traded on large exchanges such as the Nasdaq or the New York Stock Exchange. Rather, they are exchanged over the counter or on smaller exchanges. This may make them more difficult to purchase and sell, as well as more challenging to obtain precise pricing information.
Lastly, compared to normal stocks, penny stocks are typically far less well-known. This implies that it is typically more difficult to find information on them, which makes research more difficult.