How to Buy Penny Stock
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-For an ordinary person to buy penny stock, they must have a 'broker'. A broker can be thought of as the middleman between you and the market. You tell the broker you want X amount of shares of a company, and it is the broker's job to fulfill the order. One can use a 'full service' broker to assist them with their trades, or a 'discount' broker such as TDAmeritrade, for example. A discount broker lets you enter your own trades through an online interface. This saves a lot of money on 'commissions' (the price you pay for each fulfilled order). A discount broker is recommended for trading penny stocks.
-To buy penny stocks, a discount broker such as TDAmeritrade, E*Trade, Scottrade, etc. is your best bet. Each broker has it's pros and cons. Overall, our opinion is that TDAmeritrade is the best well known discount broker for trading "penny stocks". Another broker to consider as a primary, or secondary service is ShareBuilder. ShareBuilder has a very unique feature for building portfolios with very low commissions. Factors you should consider when choosing a broker include:
Some brokers may have lower basic commissions, but make up the difference with additional fees for trading low-price stocks, or by not including premium features at lower levels of trading activity. Be sure to evaluate all aspects of the broker before signing up. As a great start in your selection of a penny stock broker, please click the link below to go to our broker comparison page.
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-The amount needed to start is a highly debatable subject. The more money you have to put into a stock, the less the stock will need to increase in price before you have covered the costs of commissions and realized a profit. On the other hand, more money in a stock means you have more money at risk. When you are ready to start trading, however, we recommend having at least $500 for each stock you wish to invest in.
-To start, we recommend trading no more than 3 penny stocks at one time. You need to be able to concentrate and do homework on the stocks you own as well as stocks you are looking to buy next. If you have too many, your ability to do this will be limited, and chance of success will be reduced.
-To buy or sell a stock, you must enter an order with your broker. To explain this subject in detail, please read this article.
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What's Next?
-Now that you have an understanding of what you need to start trading and how to buy penny stocks, let's discover what a "penny stock" is and why you can make BIG MONEY trading them!
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