Penny stocks differ from regular stocks in several ways. One of the key distinctions is the price per share. Penny stocks are generally characterized by their low price, typically trading for less than a dollar. In contrast, regular stocks usually have higher price ranges, often trading in the tens or hundreds of dollars.

Another difference lies in the market capitalization and company size. Penny stocks are typically associated with small-cap or micro-cap companies, which have relatively low market values and may operate in niche industries. Regular stocks, on the other hand, encompass a broader range of market capitalizations, including large-cap and mid-cap companies that are more established and widely recognized.

Penny stocks tend to be more volatile and have less liquidity compared to regular stocks. Their low trading volumes can make it challenging to buy or sell shares at desired prices, and they may experience sharp price fluctuations based on relatively small trading activity. In contrast, regular stocks generally have higher trading volumes and are traded more actively, providing greater liquidity.

Due to their lower prices and potential volatility, penny stocks are often considered riskier investments than regular stocks. Investors interested in penny stocks should exercise caution, conduct thorough research, and be prepared for the inherent risks associated with these types of securities.