"Penny shares" are those in small firms that have fallen out of favour and are trading at very low prices. The temptation is to think that at such prices you can hardly go wrong. But while it's true that penny stocks can quickly double in value, they can equally easily halve - or worse. Even a share at 1p can fall to a 10th of a penny, for example. So you could lose just as much as with a share that goes from £10 to £1.