Everything About Penny Stocks in India

A term “ Penny Stocks ” is frequently used in Indian Stock Market. utmost of the people are confused or not apprehensive of it at all. opting good stocks to invest in stock request is really important. While investing, utmost of the people picks up the Mid-Caps and Large- Caps stock but Penny Stocks can also work well in investing if you choose it wisely. 

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What are Penny Stocks?

Stocks whose prices are below ₹ 10 is generally considered as Penny Stocks in India. These are the stocks with Low request capitalisation.

Penny stocks trades at veritably low price and volume. Liquidity in penny stocks is lower as trading frequence is low in penny stocks. unforeseen increase or drop in price of penny stocks are veritably common as price volatility is more in these stocks. This is the reason that price vaticination or movement of penny stocks using specialized pointers doesn't work utmost of the time.

crucial Points About Penny Stocks

• Penny Stocks are good for Investing

As price movement using specialized pointers isn't always possible in penny stocks because of low liquidity. therefore, it indicates that penny stocks aren't good for trading but it may be a good option if you're looking to invest for Mid Term and Long- term. Especially, if you want to start investing with lower quantum and you're a freshman in Investing.

• Advanced Returns

still, also the threat is same either if you invest in Small Capitalisation stocks or in Large Capitalisation stocks, If you're investing in stock request. Good thing about penny stocks is that you can invest with lower quantum as well. Go through the company’s fundaments and exploration well about the company’s financials and capabilities. This will help you to identify good penny stocks and these stocks may give you advanced returns if you invest in them for long term.

• Low Liquidity

Occasionally, due to low liquids in penny stocks, investors may face issues while buying or dealing their stocks. Low liquidity also increases the chances of stocks price manipulation.

• Do n’tOver-Invest in Penny Stocks

Don't invest your entire quantum in Penny stocks only as low prices of penny stocks attracts the investors. While investing, choose only 2- 3 good penny stocks to invest in. Don't over invest in penny stocks. rather, include all type of stocks in your investment portfolio. It'll help you lower your threat.

Conclusion

Penny stocks are good investing option especially if you want to invest with lower quantum or if you're a freshman in Stock Market Investing. But before investing, read and probe about the company’s abecedarian and choose penny stocks consequently.