If you’re searching for tradable Robinhood penny stocks, or the cheapest stocks on Robinhood, your investing options are starkly limited. Not only does Robinhood not permit short selling, so you can never bet against overvalued stocks in general, let alone penny stocks, but Robinhood also forbids any OTC stock trading. In simple terms, this means that Robinhood offers no tradable penny stocks.
How to Find the Best Stocks
List of Robinhood Penny Stocks 2018
These are some of the most popular stocks less than $1.00 that are tradable on Robinhood. Keep in mind, all of these stocks face delisting if their price stays low! Keep reading to see why trading these stocks is super dangerous.
Robinhood Penny Stocks
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Because penny stocks often have tiny market-caps, low prices, and extreme volatility, penny stocks are not eligible to be listed on the two major stock exchanges of the NASDAQ or NYSE. Hence, all penny stocks trade on the OTC market (Over-The-Counter). This is a serious problem for Robinhood users.
Let’s look at how to find tradable low-priced stocks on Robinhood as well as some online brokerage alternatives that let clients buy OTC stocks.
Robinhood Penny Stocks Selection is Very Limited
The phrase “trading penny stocks with robinhood” is actually an oxymoron. Since Robinhood forbids OTC stock trading, you technically cannot trade penny stocks. The closest you can get to trading penny stocks on Robinhood’s platform is trading stocks that are currently priced under $1.00 on the NASDAQ or NYSE – that is it.
At first, this seems like a non-issue. You can still buy a stock that trades on the NYSE for $0.15 per share, with Robinhood, so what’s the big deal?
Stocks less than $1.00 on the NYSE and NASDAQ generally fall into one of three categories:
- Junky energy stocks that have been decimated since the collapse of oil prices in 2013
- Sketchy biotech companies who have failed FDA approvals and seen share prices plummet
- Companies that suck so bad their once regularly priced stock slowly turned into a penny priced stock
All three of these categories are potentially problematic for investors. On the contrary, actual penny stocks that trade on the OTC market start out with ultra low penny priced stocks because they are small companies, typically with revenues of less than $10 million annually.
By going public on the OTC market, these small companies can raise capital and, hopefully grow and eventually qualify to be listed on the major NYSE or NASDAQ exchanges.
In modern times, no companies start out, i.e. IPO, under $1.00 on the NYSE or NASDAQ.
Therefore, searching for stocks under $1.00 on Robinhood, just for the sake of buying “penny stocks,” is a dangerous investing proposition. After all, stocks priced under $1.00 aren’t true penny stocks, they’re just stocks with low prices. And the prices are low for a reason.
How to Find Stocks Less Than $1.00 on NYSE and NASDAQ
With all of this said, if you still want to buy stocks under $1.00 with Robinhood, here’s how you can find them.
The easiest way to find low-priced securities is with Ally Invest’s stock screener tool. Ally Invest is a top-rated broker for penny stocks and offers an efficient browser-based stock screener that shows all stocks under $1.00 on the NYSE, NASDAQ, and AMEX stock exchanges.
You’ll have to open an account to gain access, but everything is always free of charge and there are never any maintenance or inactivity fees.
There are over 100 different selections you can make on Ally’s stock screener tool. To find stocks less than $1.00, you’ll want to select the Current Price feature and enter max value of $1.00 in the Enter Range area.
Doing this will create a list of every stock on the NYSE, NASDAQ, and AMEX that is currently under $1.00.
Go to Ally Invest’s site and open an account to gain access to the screener and the lowest trading fees in the industry with 24/7 customer service.
Once you have your list, you can easily click on each individual stock to get more company information and buy/sell directly from the platform.
How to Actually Buy Penny Stocks
Unfortunately for would-be Robinhood penny stock traders, all actual penny stocks (not just stocks under $1.00) trade OTC. This means all of the marijuana stocks, blockchain stocks, and other hot penny stocks are unavailable due to Robinhood’s policy.
The precise type of stocks that are not supported by Robinhood are the same types that have made (and lost) millions for penny stock traders like Tim Sykes. Again, buying a stock listed on the NYSE for $0.50 does not equate to buying a “penny stock.” Rather, it more than likely equates to buying a stock who’s price has fallen to near-bankrupt levels.
Three Popular Discount Penny Stock Brokers
$1 per stock
$3.95 to $4.95 per stock
$5 per stock
If you want to actually trade penny stocks, you’ll need an online broker that supports OTC stock trading. Currently, Ally Invest is the best online broker for penny stock trading in 2018.
Out of every broker that offers 24/7 customer service, Ally has the lowest trading commissions and fees. Even if you’re not going to trade penny stocks, but want to buy OTC stocks like GBTC (the long bitcoin ETF), Ally is demonstrably the most economical choice.
You’ll save money on every trade and get access to standout stock screening tools and trading platforms.
The bottom line is, if you think you can trade Robinhood penny stocks, you can’t. It’s not supported by Robinhood.
Investors should also take note of the potential risks associated with purchasing stocks under $1.00 (thinking they are trading penny stocks) on Robinhood.
Low-priced stocks on the NYSE and NASDAQ have low prices for a reason. In fact, Rpobinhood stocks under $1.00 on the NYSE and NASDAQ will ultimately be delisted if their share price stays under $1.00 for 30 consecutive trading days. Once delisted, the companies will have no where to go but the OTC exchange, where you conveniently won’t be able to trade on Robinhood.
Moreover, delisting will also occur if the company’s market capitalization falls below $50 million. Both of these situations are highly likely.
If you’re going to trade penny stocks, do it right and look for stocks that are just starting out with low prices, not stocks that already have low prices because their value has decreased as investors have dumped their positions. This is a helpful list of penny stocks to buy.
Best Penny Stocks on Robinhood
Trying to find the “best penny stocks on Robinhood” is, as you could have guessed by now, impossible. All of the good stuff, the marijuana penny stocks, the blockchain penny stocks, and any other type of penny stock, is not supported on Robinhood’s platform.
Thankfully, it’s never been easier to switch to another broker, and Ally Invest will credit and transfer fees (up to $150) if move your account from Robinhood.
Ally Invest offers penny stock trading with 24/7 customer service and free trading tools.