Buying penny stocks is one of the fastest ways to turn a relatively small amount of money into a relatively large amount of money – period.
If you invested just $1,000 in MNST (Monster Beverage Corp) when it was trading around $0.07 per share, you’d have well over $850,000 today. This is the power of penny stocks.
1 Minute Summary
- You need an online low-cost broker to buy penny stocks that permits OTC trading
- Most penny stocks trade on the OTC exchange
- There are never any inactivity or market data fees with Ally
- Consider diversifying and buying multiple penny stocks
- The goal is to buy low and sell high
Why Buy Penny Stocks?
In this world, we need money. Working a regular 9-to-5 job will never make you rich. No matter how much W2 income you save, it’s impossible to stockpile an outsized sum of cash.
Investing is one of the only ways to do this – period. Nearly all of the world’s wealthiest people have earned their fortunes through investment income, not through salaries.
Step #1: Opening an Account
The first thing you’ll have to do before you can invest in penny stocks is open an online brokerage account.
All stock and ETF trades start at just $3.95. Plus, every Ally client gets access to robust trading platforms and 24/7 customer service, and Ally never charges any inactivity or maintenance fees.
Step #2: Doing the Research
Once your account is opened (takes 5 mins), the next step is to navigate to the “Trade” tab on Ally’s online trading platform.
For this example, we’re going to use JC Penny (ticker symbol: JCP). JCP is a popular department store that has been struggling as of late, but there is chatter that their online sales channel is growing.
After you open your Ally Invest account and open the mobile trading platform, the page will look like this:
Step #3: Making the Trades
Once you’ve entered in the ticker symbol into the platform, real-time prices and buttons to buy and sell the stock will appear.
The next decision to make is the number of shares you want to buy. The exact number of shares to purchase is entirely up to you. You can buy 1 share or 1,000,000 shares. You’re only limited by the funds you have available. Ally’s system, thankfully, won’t let you accidentally purchase too many shares relative to your account value.
When it comes to placing orders, we always prefer to use limit orders, because you get to decide what price you want to buy or sell at. A market order will execute your order at the current market price. This is sort of like buying a house without looking at the offering price; for stocks, market orders are only useful if you don’t care about the short-term price movements and just want to own the stock. After submitting your order, you’ll receive a confirmation of your investment and you’ll be a penny stock investor!
If you want to sell your investment and close out your position, all you have to do is click on your position in your Ally Invest account and click “sell”. Of course, if you need help with anything in this process, customer service is ready to help you 24/7.
9 Popular Penny Stocks
JC Penny is one of the most popular penny stocks to buy (mostly because it is so well-known) but here are other popular penny stocks that Options Bro readers looked at in 2018.
(IMPORTANT: We do NOT receive any compensation from the companies on this list. These are just popular penny stocks.)
|Company||Stock Ticker||Recent Price|
|Platinum Group Metals||PLG||$0.11|
About Opening a Brokerage Account
Opening an Account
What You’ll Need
In the world of investing, penny stocks are risky but lucrative. As the old saying goes, “fortunes favor the bold.” We can’t stress enough how risky penny stocks are, but if you’re timing is right, and your research is solid, you can turn a very small amount of money into a very large amount of money.
There are tons of “penny stock success stories” on the Internet, but everyone with a story of how they turned a few thousand into a few million with penny stocks is trying to sell you their “trading secrets” for a recurring monthly fee. Trust us, you don’t need to pay money to learn how to trade penny stocks.
At the end of the day, besides penny stocks, there are virtually no other types of investments in the stock market that can yield such impressive returns in such a short amount of time.
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OptionsBro.com is an online financial information site dedicated to providing simple tutorials, reviews, and comparisons on all things finance.
Collectively, we’ve spent thousands of hours examining the most popular financial products and tools. Bottom line, we simplify and explain the myriad of consumer financial options available today, so you can make decisions with ease.
Updated: February 26, 2019