penny stocks are stocks, that traded at vrry low prices, 
but subject to extremely high risk.

A stock that trades at a relatively low price and market 
capitalization, usually outside of the major market 
exchanges. These types of stocks are generally considered 
to be highly speculative and high risk because of their 
lack of liquidity, large bid-ask spreads, small 
capitalization and limited following and disclosure. They 
will often trade over the counter through the OTCBB and 
pink sheets.

In the U.S. financial markets, the term penny stock 
commonly refers to any stock trading outside one of the 
major exchanges (NYSE, NASDAQ, or AMEX), and is often 
considered pejorative. However, the official SEC definition
[1] of a penny stock is a low-priced, speculative security 
of a very small company, regardless of market 
capitalization or whether it trades on a securitized 
exchange (like NYSE or NASDAQ) or an "over the counter" 
listing service, such as the OTCBB or Pink Sheets. The 
terms penny stock, microcap stock, small caps, and nano 
caps are sometimes all used interchangeably, however per 
the SEC definition, penny stock status is determined by 
share price, not market capitalization or listing service.

In the UK markets, a penny stock, or penny shares, as they 
are more commonly called, generally refer to a stock and 
shares in small cap companies, defined as being companies 
with a market capitalization of less than £100 million 
and/or a share price of less than £1 with a bid/offer 
spread greater than 10%. In the UK Penny Shares are covered 
by a standard regulatory risk warning issued by the 
Financial Services Authority(FSA).