If you are wondering what penny stocks are, you can wonder no longer. They are those stocks in markets which trade at extremely low prices and have a market capitalization which is on the low side. So, what are penny stocks, and what implications do they have? Penny stocks have a low degree of liquidity and they are speculative in nature, where the Indian stock market is concerned.
If this is the case where penny stocks are concerned, you may wonder why investors would invest in them at all. If you are looking for penny stocks to buy, you may be interested in them because they are low in price. Investors are of the view that these stocks may be low in price to start with, but potentially rise in price in the near future. This is how the narrative about penny stocks in the Indian market goes. However, if this looks like an interesting proposition for you as an investor, and you have answered the all-important question, “What are penny stocks?”, you should consider some factors before you leap into the ring and buy penny stocks.
All companies that have a low share price are not penny stocks. Stock prices may be low, but market capitalization may be high. Once you are aware that penny stocks represent the stocks of those companies that trade their stocks at a very low stock price, and whose market capitalization is under Rs. 100 crores, you should note the following factors before you invest:
Everytime you choose to invest in stocks, you have to do some due diligence and decide to invest. Your research and homework is important and could have a close relation with returns you may see in the future. When you invest in any stocks, you have to open a Demat account online. You can do this at Motilal Oswal and get great tips to invest in penny stocks that may certainly get you profits.
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