Penny stocks are stocks that trade at veritably low prices typically below 50 rupees. They've low request capitalization and substantially are illiquid. Penny stocks are lower- known to the larger investing public. I Investors remain down from them because the information regarding their fundamentals and businesses is either not dependable or not available. still, penny stocks are known for generatingmulti-bagger returns within a many trading sessions.

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Since penny stocks are illiquid, occasionally only a many orders can lead to hitting circuit limit on the exchange. These stocks substantially give advanced returns when they're hitting upper circuits for a number of days. Generally, this period of hitting circuits isn't accompanied with trading volumes. occasionally there's a strong abecedarian story that moves the stock up. Other times it might just be a case of manipulation by stock drivers. They instinctively inflate the price and volumes to attract innocent retail investors. Once they've enough dealers sharing in the stocks they would discharge their own effects. Now that we've understood the modus operandi of penny stocks. lets see why are penny stocks called “ Penny ” Stocks

Penny Stocks are Called Penny Stocks for a Reason!
Penny stocks trade at similar low rates for a reason because utmost of the dealers buying penny stocks do n’t indeed watch about them and look to exit sooner or latterly formerly they've given decent returns. Penny stocks in India frequently do n’t misbehave with exchange regulations. They aren't indeed transparent in their reporting.

It's only when there's some news or some reversal stories on penny stocks, that they move. The enterprise leads to an increase in trading volumes and prices soar. But veritably many of them turn out to be true or authentically strong on a abecedarian base. Any negative news causes the price to turn south.