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Penny Stock Trading for Dummies (Buy, Sell, Best Stocks)

Penny Stock Trading for Dummies

We get a lot of questions concerning penny stocks on Buy Shares In, these include:

  • What are Penny Stocks?
  • How Can I Invest in Penny Stocks?
  • What Are the Best Penny Stocks?
  • What are Penny Stocks?
  • Are Penny Stocks Worth It?

In this penny stock trading for dummies guide we aim to answer all of them, putting your mind at rest as we take you on a guide through this stock type.

What are Penny Stocks?

Basically, they are stock that can be bought for a few pennies each. They are also known as “Cent Stocks” and “Penny Shares”. The term is not used to refer to a stock that can be bought for a single cent or a single penny. This is a common misconception.

Penny stocks don’t actually have a strict definition. Some sites offerings “Lists of the Best Penny Stocks” have several stocks that actually cost in excess of $5 (unlike our guide on the Best Stocks Under $5).

The fact that these stocks can be bought for so little means there is a lot of room for movement. If the company does well and the stock goes up, then your involvement will be worth much more. The holy grail of stock investment is to have a penny stock that goes though the roof, turning a small investment into a sizable fortune. Such occurrences are rare, but they do happen and have happened to any companies you are probably familiar with, as discussed in this penny stock trading for dummies guide.

How to Buy Penny Stocks

Buy Penny Stocks

You can use normal stock trading programs to buy penny stocks. However, because they only focus on the bigger stocks, you can rarely get any success with CFD trading programs and forex trading programs. These are all about indices, commodities and currencies. They do have a selection of stocks, including big players like Cisco and Microsoft, but it’s rare to find penny stocks.

To see more about the sort of programs that can allow you to buy penny stocks, take a look at our page on Halifax Share Dealing and Plus500. There are many more out there though, so you should also take a look at our Online Trading page, as well as our Best Stock Trading Programs post. All of these should let you purchase penny stocks in some way or another.

Of course, they don’t have a list of “Best Penny Stocks” where you can simply select the top ones, make an investment and then watch as the money rolls in. You have to do this research yourself. But we have some penny stock tips below that can help to make this process easier for you.

Top Penny Stocks Today

Top Penny Stocks

This is a very common question we get: “What are the best penny stocks today?” People know the market moves fast, they know that penny stocks are volatile, so they are always looking to buy a stock today that will be worth a fortune tomorrow. That’s understandable, but it’s not quite how it works.

Firstly, these things can still take time. A rise can be instant, but in most cases even penny stocks will rise gradually. You only need to look at Netflix Stock to see what we are talking about. This was a top penny stock that you could purchase for very little during the first year or so after it’s IPO. When it began to perform well, it received a boost and it began to climb. But it was weeks before it was truly bumped up in value. If you had paid any attention to it during those weeks then you would have spotted it and you might have taken your chances.

We all certainly lie to think that we would have invested in these companies if we had been given the chance. But the truth is, it’s hard to know how far they will go, even when they have already received a boost. All you can do is watch for penny stocks to increase, keep a close eye on them, do your research into them and then make your mind up.

Ot might go through the roof. It might be a Netflix, or an Apple. Alternatively, it might sink and disappointing after its IPO.

That’s what investing is all about. There is no telling what will happen and when it comes to penny stocks you just have to take your chances.

Penny Stock Trading for Dummies

Okay, so the term “penny stock trading for dummies” is not very nice. We don’t think you’re a dummy because you don’t know something. If anything we praise you for asking questions and we always welcome questions here on Buy Shares In. We were just asked to use this title by our editors—and we can’t turn down the people in charge.

This penny stock trading for dummies guide has hopefully answered your questions already. But there are others that you have asked and that we will quickly address now:

  • Are Penny Stocks Scams? This is a question that gets asked about everything. The answer is a simple no.
  • Are Penny Stocks Worth It? They can certainly feel worth it if you win big, but you’ll regret ever getting involved if things go the other way. We always have some of these on our portfolio, but we recommend avoiding putting too much into them and making sure you are well informed before you start getting involved.
  • Are Penny Stock Dangerous? In the sense that you can lose a lot of money, yes. There are no legality issues, as some of our readers seem to be concerned about, but they are volatile.
  • What Penny Stocks Are Doing Well? This is not an easy question to answer because this is a static page and not a topical one. Also, if they do really well, then they stop being penny stocks. Just check with our guides and other investment pages, as well as our news pages, to stay in touch with such information.

NASDAQ Penny Stock List

Penny Stocks List

What follows is a list of NASDAQ penny stocks, ones that we have picked out as being our favorites at this point in time:

  • Groupon (NASDAQ: GRPN): A company you are probably familiar with, this one is seemingly on the rise and could have a very bright future if this industry continues to move at the rate it is going.
  • Office Depot (NASDAQ: ODP): We have already covered this on another Best Stocks list, and it deserves a mention here as well.
  • Immune Pharmaceuticals (NASDAQ: IMNP): A true penny stock. A potential giant in a very profitable industry. You only need to look at the likes of Pfizer and GlaxoSmithKline to see just what this industry can do for those involved within it.

NYSE Penny Stock List

The New York Stock Exchange is the biggest exchange in the world and a great place to find stocks for this penny stock trading for dummies guide.

  • Twitter (NYSE: TWTR): This is a company that seems to have it all, but hasn’t quite been able to figure out how to make money. Facebook went the other way, turning its members into big money. Twitter haven’t done that yet, but if they find out a way then this could be a top penny stock. This is the only one we have on this list because it’s one that we really want to stress the importance of. They may not be backed up by WhatsApp and Instagram, and they may have sold Vine, but we think the future is very bright for Twitter stock.

LSE Penny Stock List

On the London Stock Exchange, they are known as “Penny Shares”, but these words are interchangeable.

  • Rose Petroleum (LON: ROSE): We have been watching this for sometime. It has had its ups and downs, and it is very low right now. But it has a lot of potential and if it manages to reach that then you will secure a sizable profit. We have an investment in this share here at Buy Shares In (full disclosure). We’re not as confident as we are with others though and it’s one that you definitely don’t want to invest a lot in, but by all means keep an eye on it.