Since penny stocks are the cheapest stocks in the market, they are easier to invest with. Most new investors who do not have big amount of money for capital prefer to buy penny stocks to start with their investment. However, penny stocks are riskier because they are not sold in regular stock market; they are sold through OTCBB and pink sheet markets, and usually, the Securities and Exchange Commission do not require these companies to submit financial reports. This is actually one of the primary challenges in investing with penny stocks. Yet, there are still lots of investors who are buying penny stocks in the hope that they will be successful later on.
Penny Stocks Through Online Brokers
Usually, penny stocks are traded online with the help of an online penny stock broker. There are plenty of brokerage firms to choose from, and because of this, you can easily find the kind of online broker that would fit your requirements and budget.
It is very important to know the brokerage firm that you choose since after all, you will entrust your funds and investment with them. In addition, you have to find out the fees that such brokerage firm will charge on you and make sure that you choose the one which is free from hidden charges. This way, you will be able to know how to manage your expenses properly. Some online brokerage firms offer investing and stock tips, along with good customer service. Obviously, you have to ensure that you open an account with the one whom you could truly trust.
Buying Penny Stocks Online
It is important to know how to buy penny stocks online. First, you have to find an online broker that would suit your needs. If you are after the low fees and good customer service, TradeKing and Scottrade are two of the best brokerage firms that are most recommended by investors. You need to open an account with your chosen broker for you to be able to trade in penny stocks.
Your broker will help you in finding the suitable companies that sell OTC stocks. Though most brokers will assist you with your penny stock investment, it is still necessary to find time to monitor your investment on your own, so you will know its progress. Furthermore, it is recommended that you do your own research and understand the penny stock warning signs in order for you to lessen your risks.
Selling Penny Stocks Online
After learning how to buy penny stocks, you must also take time to know and understand how to sell penny stocks online. Actually, the process is almost the same — you will still need the help and assistance of an online penny stock broker in order to sell OTC stocks online. Remember that when you open an account with an online broker, you will be able to trade stocks online, and trading refers to both buying and selling.
Both brokerage firms mentioned earlier, TradeKing and Scottrade, are still the best options for selling penny stocks online because of their low charges. Also, they are reliable when it comes to making their clients understand the process on how to buy and sell penny stocks, and best of all, they offer great and efficient customer service.