11/23/2023 0 Comments Cum rocket stockPenny stocks trade at such low rates for a reason because most of the traders buying penny stocks don’t even care about them and look to exit sooner or later once they have given decent returns. lets see why are penny stocks called “Penny” Stocks Penny Stocks are Called Penny Stocks for a Reason! Now that we have understood the modus operandi of penny stocks. Once they have enough traders participating in the stocks they would offload their own holdings. They artificially inflate the price and volumes to attract innocent retail investors. Other times it might just be a case of manipulation by stock operators. Sometimes there is a strong fundamental story that moves the stock up. Generally, this period of hitting circuits is not accompanied with trading volumes. These stocks mostly give higher returns when they are hitting upper circuits for a number of days. Since penny stocks are illiquid, sometimes only a few orders can lead to hitting circuit limit on the exchange. ![]() However, penny stocks are known for generating multi-bagger returns within a few trading sessions. I Investors remain away from them because the information regarding their fundamentals and businesses is either not reliable or not available. Penny stocks are lesser-known to the larger investing public. ![]() They have low market capitalization and mostly are illiquid. Penny stocks are stocks that trade at very low prices normally below 50 rupees.
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