How do you buy penny stocks?
-For an ordinary person to buy penny stocks, 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.
What stock broker should I use?
Check out our Penny Stock Broker Comparison feature.
-To buy penny stocks, a discount broker such as ChoiceTrade, Zecco, E*TRADE, TDAmeritrade, etc. is your best bet. Each broker has it's pros and cons. Overall, our opinion is that ChoiceTrade is the best discount broker for trading "penny stocks". Another broker to consider as a primary, or secondary service is Zecco. Zecco is another low priced option, albeit with less bells and whistles, that offers FREE trades when you meet requirements. Factors you should consider when choosing a broker include:
- Commissions: How much they charge per trade (read the fine print)
- Minimum funding to open an account
- Inactivity and Maintenance fees
- Features and Tools
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.
NEW! Check out our Penny Stock Broker Comparison feature.
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How much money do I need to buy penny stock?
-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.
How many different penny stocks should I buy?
-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.
How do I actually set a 'buy' or 'sell' order for a stock?
-To buy or sell a stock, you must enter an order with your broker. To explain this subject in detail, please read this article.
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 exactly a "penny stock" is and why you can make big money trading them!
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