Penny stocks are stocks that trade at a low price, typically below $5 per share. They are different from other stocks, such as blue-chip stocks, in several key ways. Firstly, penny stocks are often issued by smaller, less established companies with limited operating histories and uncertain futures. Secondly, these companies may have limited resources, which can make it difficult for them to fund their operations and grow their businesses. Thirdly, the low price of penny stocks makes them more susceptible to price manipulation, which can result in significant volatility in the market. Additionally, the low liquidity of penny stocks can make it difficult for investors to buy or sell their shares, even in the case of major market events. This is in contrast to larger, more established stocks, which tend to be more stable and less susceptible to price manipulation.

Penny stocks differ from other stocks primarily in their price, market capitalization, and regulatory requirements. Penny stocks are usually traded at very low prices, often below $5 per share, and are typically issued by small or newly-established companies. Due to their low prices and smaller market capitalization, penny stocks tend to have less liquidity and are more volatile than other stocks traded on major exchanges. Additionally, penny stocks are often subject to fewer regulatory requirements and may lack the same level of scrutiny and transparency as larger, more established companies. While penny stocks can offer the potential for significant gains, they also carry higher risks of loss due to their speculative nature and susceptibility to manipulation. Investors in penny stocks should conduct thorough research and exercise caution to mitigate these risks.