What is a Penny Stock

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What is a Penny Stock🔥



A penny stock refers to shares of a company that trade at a very low price — usually below ₹10 in India or below $5 in the US. These stocks belong to small or unknown companies that are not well-established in the market. Penny stocks are often not listed on big stock exchanges like NSE or BSE, and they are considered high-risk investments because the companies may not have strong financials or business models.

Example✍️

Imagine a company called XYZ Textiles Ltd that is very small and not widely known. Its share price is just ₹6. Since the company has low profits and not much public information, its shares are considered penny stocks.

An investor buys 1,000 shares of XYZ at ₹6, spending ₹6,000. If the company grows and the share price increases to ₹20, the investor makes a good profit. But if the company fails or shuts down, the investor could lose most or all of the money.


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