Penny shares - Not for widows and orphans!
Generally, they are shares in small, high risk companies.
Strict definition of a penny share is one where the spread between the bid and the offer price (link) is more than 10pc of the offer price.
The holy grail for penny shares specialists is to find a stock that increases in value in a very short space of time.
The bulletin boards are full of people bragging that share X or share Y is a ten bagger - a share that will rise tenfold, delivering a mouthwatering profit.
The truth is very few of these fledgling stocks burst into life in the way you expect and many crash and burn.
By all means invest in penny shares, but always do your research - thoroughly - and be prepared to write off the investment if you get it badly wrong.
Remember with the spread between the bid and offer price being so wide, the share price will have to improve by more than 10pc before you break even.