There is a lot of hype around penny stocks. You need liquidity to get in and out of stocks and penny stocks don’t allow you to do it. So Why are they like it?
People like cause on a vague rumour they can gain 1000% in a few days. I had 1 turn my battered $70 literally account into $900 area pretty much over night. Ofcourse, just before that 1 i jumped on a penny that was running wild, sub 2mins literally, before it was suspended and delisted and wortgless, why i only had 70 lol
In my opinion there is more risk with larger stocks, especially ones in play. They have larger spreads and they can fluctuate 50 cents in a tick if low float. I don't trade anything over 60 dollars.. And I don't really like to trade anything over 30.. Obviously you can use smaller positions but 30 dollar stocks move differently from stocks in the 2-5 range
Probably the attraction for some is because lower price stocks often have higher % daily range compared with higher priced stocks. Conversely, higher priced stocks usually have a higher $ daily range compared with lower priced stocks. Personally I wouldn't trade low priced stocks.