2. What is Penny Stock?
◉ Penny stocks are a form of market
traded security that are traded at a
very low price, have very low market
capitalization, are mostly illiquid, and
are usually listed on a smaller
exchange.
◉ In Indian stock market, Penny
Stocks can have prices below Rs
10.
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3. SOME OF THE BEST PENNY STOCKS IN INDIA
◉ Vodafone Idea Ltd
◉ NHPC Ltd
◉ Morepen Laboratories
◉ Manali Petrochemical Ltd
◉ HBL Power systems Ltd
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5. Misconceptions related to Penny stocks -
◉ A large company today was once a penny stock.
◉ Penny stocks are short cut to make money.
◉ Good companies are overpriced and don’t make money.
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6. Mistakes Penny stock traders make -
◉ Stocks are risky by default
◉ Not having a trading plan
◉ Lack of confidence
◉ Having the wrong mentality
◉ Getting trapped in the hype
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7. Risk associated with Penny stocks -
A. High volatility and liquidity:
a. Price fluctuates from high to low at rapid space
b. Less liquid in nature
c. Volatility can be measured with
i. Standard deviation
ii. Bollinger Band
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10. C. Short and Distort scams:
a. Opposite of pump and dump scheme
b. Use of short selling to make a profit
c. Price is made to fall by spreading false negative news
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