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Wall Street is the financial market of New York. Wall Street houses a number of stock exchanges including the New York stock exchange and NASDAQ, which are two of the biggest stock exchanges in the world and hence Wall Street witnesses some of the most intense transactions in the stock market every day and witnesses the rise and fall of many popular companies. Penny stocks or cent stocks as they are known in many countries are also traded at the Wall Street. Penny stocks are basically stocks that trade at less than one dollar and sometimes even in fractions of a cent.

Penny stocks can be very risky to trade in if you aren’t fully aware of company you are dealing with. Penny stocks are basically traded by companies which have very low liquidity. Low liquidity means that the stocks are prone to manipulation. Suppose a company buys millions of shares in one such company. The buying company can then uses internet, emails and blogs to attract interest in the company which would consequently mean that more and more investors will buy the shares. Greater selling of shares would mean that the price of shares would go high. When the company which bought millions of shares will sell them, the prices will drop sharply leading to loss for the investors. The advent of internet has made penny stocks more prone to manipulation. Hence while trading in penny stocks, you should ensure that the company you are trading in hasn’t sold of millions of shares to any company in recent history.

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