How to buy Penny Stocks?

Posted on: February 6, 2013
How to buy Penny Stocks?

You found out how rewarding penny stocks can be and now you wonder to yourself, how can I buy penny stocks? One of the biggest advantages of penny stocks are their lower prices than most regular stocks which makes it easy for beginning investors to own them. You don’t need a lot of money to start buying penny stocks. An account as low as $500 is enough to start trading. A penny stock is a publicly-traded stock trading at a very low price per share, usually defined as under $5 or even under $1.

So, how to buy penny stocks and where do you buy penny stocks? It’s pretty simple to get started and you don’t even need that much starting capital to enter the penny stock world.

The easiest way to trade penny stocks is by buying them through a broker. You will have to decide on a stock brokerage as your first step. There are several online stock brokerages available. You will have to visit their websites to determine which one is the best for you.

Many brokerages will have different fees, commissions, and service reliablity. You will have to be comfortable trading on their platform as well. There are some brokerages that are more pricey than others. Some will do everything for you and others will allow you to do your own research and management on your own. You have to determine what is best for you. Most brokerages offer you in depth tools to research and manage your portfolio.

Once you find the one you are most comfortable with, you have to open an account with them and then fund it. You can fund your trading account through checks, wire transfers and bank-to-bank money transfers.

Some online discount stockbrokers include: TD Ameritrade, Charles Schwab, Etrade, Fidelity Investments, Scottrade, TradeKing, and Vanguard. There are many more though if you start searching. One of the advantages of Scottrade is that they only require a minimum deposit of $500 to start trading.

Once you have an account set up you can start buying penny stocks. As a reminder, it’s crucial to have a good understanding of penny stock investing before you start buying. These kind of stocks can carry more risk than the average stock but can also offer explosive gains quickly. Subscribing to a reputable newsletter that provides real-time trading alerts and has a proven track record can significantly help you find the best penny stocks trading in today’s market.

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