what is penny stock?
Sign Up to our social questions and Answers Engine to ask questions, answer people’s questions, and connect with other people.
Login to our social questions & Answers Engine to ask questions answer people’s questions & connect with other people.
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
A Penny Stock is a very cheap stock that usually trades at a low price and belongs to small or lesser-known companies. Simple Definition Penny stocks = Cheap shares of small companies Usually: Under ₦20 in Nigeria (informal rule) Under $5 in U.S. markets Characteristics of Penny Stocks ✅ Low price ✅Read more
A Penny Stock is a very cheap stock that usually trades at a low price and belongs to small or lesser-known companies.
See lessSimple Definition
Penny stocks = Cheap shares of small companies
Usually:
Under ₦20 in Nigeria (informal rule)
Under $5 in U.S. markets
Characteristics of Penny Stocks
✅ Low price
✅ Small companies
✅ High risk
✅ High growth potential
✅ Low trading volume (sometimes)
Example (Nigeria Market)
Typical Nigerian penny stocks (prices change often):
UPDC
Chams
Japaul Gold
Unity Bank
FTN Cocoa
AIICO (sometimes)
These stocks usually trade below ₦20
Advantages of Penny Stocks
✅ Cheap to buy
✅ High growth potential
✅ Good for small capital (like your ₦13k)
✅ Opportunity to buy many shares
Example:
₦5,000 in ₦5 stock = 1,000 shares
If price moves to ₦8 → big gain
Risks of Penny Stocks ⚠️
❌ Very volatile
❌ Can fall quickly
❌ Some companies weak financially
❌ Low liquidity sometimes
Example
If you buy:
₦5 stock → buy 1,000 shares
Price rises to ₦8 → You gain ₦3,000
But:
Price falls to ₦3 → You lose ₦2,000
That’s why penny stocks are high risk, high reward.