Glossary: Penny shares

The generic term for shares with a low value. Although there is no specific price that a penny share has to achieve to be called that, in the UK penny shares are often shares with a value roughly between 1p (or lower) and £1 and in the US, less than $1. The appeal of penny shares is that a small movement in price means a big movement in percentage (a share valued at 1p that increases to 1.5p is a 50% return on investment) but penny shares are infrequently traded and lack liquidity, so buying/selling could be problematic.

Relevant to: Stocks & shares

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