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Penny Stocks That Give Huge Returns, But Also Risks, Know About Them

Penny Stocks: If you want to invest in the stock market, then you should also get information about penny stocks. These are the stocks that have the potential to deliver strong returns but at the same time carry a lot of risk. Today we are going to tell you about these penny stocks:-

what are penny stocks,

  • The shares whose price is very low are called penny stocks.
  • Shares priced below Rs 10 are generally called penny stocks.
  • Their market capital is also less.
  • These are non-liquid on most exchanges.
  • Penny stocks are mostly low research stocks.
  • Most of the investors are not aware of these.

There is a risk in

  • The market capital of these companies is very less.
  • A company with low market capital is volatile. Therefore they are more at risk.

That’s why investors buy

  • Often new investors who have little knowledge of the market or who have a small investment amount buy penny stocks.
  • If a new investor buys a penny stock of Re 1 with a small investment amount like Rs 10,000, then he gets 10 thousand shares.
  • Such an investor can also buy 1000 shares of a stable company, which would give him 10 shares. But due to less information, investors are unable to understand the difference between price and value.
  • Many investors invest money in such companies thinking that these companies will grow with time. But it is very difficult for every company to do this.

Therefore, there is a need to be very careful while investing money in penny stocks. This can be extremely risky.

Disclaimer: (The information provided here is for informational purposes only. It is important to mention here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. Anyone from ABPLive.com Also investing money is never advised here.)

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