Penny stocks are those stocks whose price ranges from a minimum of Rs 0.01 to a maximum price of Rs 10. They are traded both on the BSE and NSE. Because of their lower price, penny stocks are preferred largely by amateur traders. It is almost a zero-risk game and a good start for them. Investors can earn up to 500% gains or even higher if one chooses the right bait. In India, shares of companies with a market capitalisation of less than Rs 10 crore, are also hailed as penny stocks.