Penny Stock

A penny stock is a company's share that trades for less than $5 per share, usually on smaller exchanges rather than major ones like the NYSE. You'll mostly encounter these when browsing discount brokers or online forums—they appeal to investors with small budgets since you can buy many shares for little money. The catch: penny stocks are riskier because they're often from newer or struggling companies with less public information available. They're also prone to wild price swings and sometimes manipulation. For example, someone might buy 1,000 shares of a penny stock for $200, hoping it jumps to $10, but it could just as easily drop to zero. They're exciting but require extra caution and research.