PENNY AND Z CATEGORY STOCKS! STAY AWAY FROM IT

1. What are penny and Z category stocks: 
There is no formal definition of a penny stock. Usually a stock trading below Rs 10, or at a price less than the face value is taken as a penny stock. Stocks that have not complied with or breached provisions of the listing agreement of the BSE are pushed into the Z group.

2. Illiquid, high bid-ask spread:
Usually these stocks are illiquid and they have a high bid-ask spread. One cannot exit from the stock easily or with relative less profit

3. Easily influenced by the operators:
There is more room for manipulation in penny and Z category stocks. The operator driven stocks see a meteoric rise and fall. More often than not, investment in these stocks result in a loss as they have a free fall when things go bad.