How to Buy Penny Stocks for the First Time

Many investors who have just found out about penny stocks often wonder, how do you go about buying them? Penny stocks, even though some of the most risky investments in the market, can create very high gains as well. This makes them attractive to a lot of investors who know what they are doing.

Penny stocks trade for under a dollar usually but technically they are any stock that has a share price of fewer than five dollars. You will not find these stocks trading on the major exchanges. Due to the fact that many penny stocks are prone to fraud and other issues, they do not pass the stringent requirements to be listed on the major stock exchanges.

You can however buy penny stocks through brokers using the OTC systems. This means over the counter.

You can play these stocks two ways – you can buy them with a stock broker who specializes in penny stocks or you can do it yourself on an online stock exchange. Most people opt to do penny stocks without a broker because it’s easier and costs less. You have to pay a commission to a broker.

Buying penny stocks will take a combination of skill and understanding of the market. If you are just starting out in the market, make sure to do a little homework so you at least have a grasp of how the market works. You don’t need too much money to get started with penny stocks fortunately. You do however need proper training in the market, and some techniques to get into the best penny stocks in the market today.

There are many websites and programs that can help you with this. They offer services that help you find the top penny stocks trading today. Make sure to look over the internet for a penny stock picking program. You want to make sure it’s a reputable one. You can even try signing up for a penny stock newsletter that sends you penny stock ideas periodically, sometimes on a daily basis. Remember to always do your research on any tip given to you.