Penny stocks and low-volume securities are prime targets for pump and dump schemes due to their inherent market vulnerabilities. These stocks, often priced below $5 and traded on over-the-counter (OTC) markets or small exchanges, have minimal liquidity, meaning even small buy orders can trigger dramatic price swings. Since they lack widespread analyst coverage and institutional investment, they are more susceptible to manipulation through false rumors, hype, or coordinated buying. Fraudsters exploit their low float (limited shares available for trading), allowing them to artificially inflate prices with relatively small capital before dumping their holdings on unsuspecting retail investors. Additionally, penny stocks are less regulated than major exchange-listed securities, making it easier for scammers to spread misleading information without immediate scrutiny. The absence of high trading volume means that once the "dump" phase begins, the stock can collapse rapidly, leaving late buyers with significant losses. Combined with the lack of public information and the tendency of inexperienced traders to chase quick gains, these factors create an ideal environment for manipulative schemes, making penny stocks and low-volume securities a playground for pump and dump operators.