Pushkar,
Consider this scenario; you got a great sure shot tip for a stock trading at Rs.2/- and you bought 1 lakh shares. The price went to 2.25 ... you had a nice profit of 25000. You are happy and the world seems a nice place. Next day, the market goes into a correction and you find that the price of your stock comes down to 2.05. Thinking that better to have 5000 as profit rather than nothing you decide to sell your holding. But to your surprise there are no buyers and the price is dropping ... you become desperate and try to get out at any price you can get ... but no buyers (Till yesterday this stock was the talk of the penny traders and today you can't even find one to bail you out!). The price drops to 50 paise ... you have a loss of 150000 with no exit in sight! This my friend, is tha saga of most penny stocks.
Penny stocks are generally operator driven. They are baits cast by these operators to fish in greedy waters and catch bakras. Once their nets ar full, thye pull the rug from under your feet and go laughing & counting your money to their banks.
So beware penny stocks, friend. Small capital is for growth and not for erosion! This market is full of good stocks that will give you a decent return. However, if you wish to play Russian Roulette ... at least be warned, there may be a bullet in the next chamber!
Cheers
Kuldeep
