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Penny stocks are an interesting and sometimes hot topic in the investment world. Beginners and seasoned traders alike may benefit from these unique stocks. So whether you’re looking to learn more about penny stocks or trying to find the best place to trade them, I’ve got you covered. And hey, even if you decide that penny stocks aren’t right for you, you may be able to benefit from any of these apps. There are some of the best apps for trading penny stocks.
Related: Best Brokerages for Beginners
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Overview of the best penny stock apps
Penny stock app | Best for |
Charles Schwab | Advanced, intricate platform |
E*TRADE | Flexible mobile app options |
Fidelity | Research and information |
Robinhood | Simple, easy-to-use mobile app |
TradeStation | Education tools |
The best penny stock apps
Charles Schwab
Charles Schwab is a well-known name in the investment space, so it’s no surprise that it offers access to penny stocks. Its customers can trade penny stocks through multiple exchanges, including over-the-counter markets and pink sheets stocks.
Even investors just starting can take advantage of all that Charles Schwab offers. A Schwab brokerage account has no account minimums and no recurring fees. There’s also no online stock trade commission.
Customers can trade using either the desktop or mobile apps offered by Charles Schwab. You can access StreetSmart Edge, Charles Schwab’s premier trading platform, when using your desktop or laptop. This platform uses sophisticated technology to make finding and placing trades as quick and easy as possible. It also offers several layouts and tools that can be adjusted for every skill level. The mobile app allows you to manage your account and trade stocks in just a few simple steps, making it a great tool for the on-the-go investor.
An important thing to consider about Charles Schwab is that as intricate as this platform is, it might be overwhelming and intimidating to a new user. But, if you’re willing to dive in and learn how to use the tools and resources you need based on your experience, it’s a great, affordable option. It’s also important to note that Charles Schwab has acquired TD Ameritrade, and this means customers now also get access to the thinkorswim platform, a trading platform for self-directed investors.
E*TRADE
E*TRADE offers a few different experiences you can choose from, making it a bit more appealing to new users. The desktop, mobile, and web apps offer key features and tools for an investor of any experience level.
The desktop version of the trading platform, Power E*TRADE, offers user-friendly tools that can give you the best Wall Street experience. It features easy-to-understand definitions of all the industry terms you might see in your trading experience. You’ll also have access to dynamic charting, risk-reward analysis, and other important tools to help you make the best investment decisions.
One of the best features of E*TRADE is that you can choose your mobile app experience. The regular E*TRADE app lets you do everything you need right from your phone. You can invest in penny stocks and other investments from your app, manage your money, and monitor breaking news. You can also use a version of Power E*TRADE in mobile app form. This mobile app is a companion to the web platform and gives you access to interactive charts and more detailed information and news.
E*TRADE has been dealing with online trading for decades, and penny stocks are just one of many things you can invest in using this platform.
Fidelity
Fidelity offers a top-of-the-line trading platform and access to the best research on various topics, including penny stocks. Additionally, it offers a comprehensive look at your financial goals and how to reach them.
With Fidelity, you can make informed trading decisions using its Active Trader Pro platform. This platform offers real-time insights and actionable alerts to update you on trading opportunities. The platform also offers a Daily Dashboard, which you can use to watch all the earnings announcements, economic events, and real-time news related to your portfolio.
As advanced as it is, Fidelity makes it easy to customize Active Trader Pro to your tastes and needs. When you sign up, you can use a predefined layout to get you started. As you learn, you can build a custom layout with the tools that are useful to you. You can even customize your layout with the colors and font sizes that best fit your preferences.
Since Fidelity is so well known for its top-notch research, it’s no surprise that it includes a full viewpoint on penny stocks. This clearly defines what a penny stock is, as well as the risks that you should be aware of before you invest. At the end of this viewpoint, Fidelity includes links to help you take the next steps to invest in penny stocks.
Robinhood
If you’re looking for a platform that focuses on mobile trading, Robinhood may be the one for you. The app is known for being a streamlined and approachable option for beginners, but anyone can benefit from its platform.
This platform offers a wide variety of trading opportunities, no matter your interest. Using Robinhood, you can trade stocks, ETFs, options, and even cryptocurrency. Additionally, you can use Robinhood’s modern approach to financial news and educational resources.
Unlike some competitors, Robinhood’s mobile app offers more features than its web platform. For investors who are on the go and prefer simplicity, this could make it a more attractive option when compared to other trading platforms.
As far as penny stocks go, an important thing to understand about Robinhood is that the platform only supports penny stocks that trade on the major exchanges — NASDAQ or New York Stock Exchange (NYSE). Using Robinhood, you cannot trade over-the-counter (OTC) or pink sheets penny stocks.
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TradeStation
TradeStation is geared toward active traders and technically-minded investors, but in recent years, the company has been making more of an effort to appeal to newer investors. While it may take some time to adjust to the platform, you should be able to find almost any tool that you need for your investment strategies.
Getting started with TradeStation is as streamlined as possible, and you can get your account up and running within the same day. However, navigating the platform options and the pricing structure can be a bit of a headache compared to some of its competitors. The costs are broken down in several ways, including per-contract commissions, futures transaction fees, and annual inactivity fees.
Despite the costs, TradeStation provides excellent research capabilities that provide traders with robust stock screener capabilities. You’ll also have access to a portfolio analysis that includes analytics, optimization, and performance reporting. A watchlist can be set up and customized to help you transition from researching to trading stocks. You can even break down your portfolio’s performance to assess what’s working and needs to change.
The educational resources that TradeStation offers may be where it outshines its competitors. You’ll have access to webinars, courses, community forums, and frequently updated market insights. You’ll also be able to use a simulated training technique to open a simulated account and test-teach trading strategy to get hands-on experience before diving in.
Penny stock apps summary
App | Account minimum deposit | Account fees | Online stock trade commission |
Charles Schwab | $0 | $0 | $0 |
E*TRADE | $0 | $0 | Up to $6.95 for over-the-counter stock trades |
Fidelity | $0 | $0 | $0 |
Robinhood | $0 | $0 | $0 |
TradeStation | $0 for TS Go accounts; $2,000 for TS Select accounts | $0 | $0 |
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How are penny stocks traded?
You can find penny stocks on several markets. Some are traded on major exchanges like NYSE and NASDAQ. Some experts suggest only trading penny stocks that are available on these exchanges. You may also run into a stockbroker who will only deal with penny stocks traded on these exchanges.
OTC stocks
Penny stocks can also be found over the counter (OTC). OTC stocks are traded via a broker-dealer network instead of on a centralized exchange. This isn’t always a negative thing, but in some cases, it might mean that the securities didn’t meet the requirements to have a listing on a standard market exchange.
If you want access to penny stocks from the major exchanges and in the OTC marketplace, brokerage firms such as Interactive Brokers might be the place to go.
Why you should use penny stock apps
How to make money online without paying anything can be a risky investment, but that doesn’t necessarily mean that you should avoid them entirely. Instead of being drawn in because of the affordable price alone, you should be sure to understand penny stocks and the risks before you try to make a living day trading them.
Fortunately, most trading apps today offer plenty of affordable resources that can help you determine whether trading penny stocks is for you. Although most apps offer similar features, some unique differences separate them, and these should be taken into consideration. If you’re new to investing, you’ll probably want to look for an app that is relatively straightforward to navigate. You may also want to check to make sure you won’t be charged a fee or penalized otherwise if you aren’t an active trader.
If you’re looking for an app that will allow you freedom when trading penny stocks, you’ll also want to consider this. Some apps might discourage trading penny stocks due to the risks. Others might only trade penny stocks that are available on major exchanges. If you’re not looking to get involved with OTC markets, this might be okay. But if you want the option to trade on OTC markets, it’s probably best to start using an app that will give you that flexibility.
Even if you’re not looking to trade penny stocks — or if it’s not the main focus of your investment strategy — trading apps can be a huge asset to you. Many apps offer no minimum account deposit or account fees, making it easy and affordable to start trading. You’ll also likely find commission-free stock opportunities within these trading apps.
FAQs
What is a penny stock?
A penny stock isn’t always just one penny, but it does typically refer to stocks that trade for less than $5 per share. Penny stocks are usually associated with a small company.
Why do penny stocks exist?
Penny stocks can offer an opportunity for small businesses to access public funding and can be used as a stepping stone into a larger marketplace.
Are penny stocks a risky investment?
Unlike some other commodities on the stock market, penny stocks usually don’t have much liquidity and are traded infrequently. Due to the lack of liquidity, penny stock traders may find it difficult to sell stocks. So, even though they are inexpensive to buy, penny stocks are generally considered a high-risk investment because the lack of liquidity means that investors can lose most of or all of their investment.
How would I know which penny stocks to invest in?
If you’re investing in penny stocks, then you’ll want to do some market research. Fortunately, most trading platforms can offer you the tools you need to do this. One thing to remember is that instead of focusing solely on share prices, you should focus on the market capitalization of the company. This is determined by the stock price and the number of shares outstanding.
The bottom line
There are several trading apps that you can use to trade penny stocks. Each one offers its own unique set of tools and resources, so it’s important to consider which one best matches your goals. Some may be designed for advanced investors, while others are more approachable. There are even trading apps that can work together with other products to help you monitor progress toward your financial goals.
When it comes to penny stocks, it’s easy to get swept up in the low cost as an affordable approach to investing. However, penny stocks do come with risks, so it’s important to do your research and evaluate those risks. As a new investor, adding some penny stocks to your portfolio might be interesting to see what happens. But due to the nature of penny stocks and the risks involved, penny stocks are not likely to provide a one-way ticket to financial freedom.
The bottom line is no matter your level of interest in penny stocks, if you’re interested in investing, there’s probably a trading app out there for you.
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Ashley Hart is a lead copywriter and digital marketing expert covering finance, law, real estate, music, entertainment, health and wellness.
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