Penny stocks, as tradition states, are any stock that trades below five dollars. Any stock trading below one dollar is a true penny stock. Many people are attracted to penny stocks because of their low price and the amount of shares that can be purchased for less money than larger stocks.  Penny stock investing should be approached with caution and proper research should be done before buying equity in the company.

great gain = high risk
that is how it works generally. I've found you can make a good bit of money with penny stocks but it requires a lot more work then regular stocks, since you always have to stay on top of them.  most penny stocks don't make good long term investments. You are constantly buying low and pulling out when the stock is up, before it goes back down again.