Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.
The best part of investing in penny stocks consists of the fixed amount of risk you need to take upfront to purchase the stock and the risk-reward ratio of the investment. Buying cents per share might seem risky since many stocks trading at that level are on their way to oblivion. Returns can grow quickly if the stock ultimately begins to climb.
If you catch onto a penny stock during someone else’s “pump and dump” scheme, you can make money if you buy quickly and sell before the price drops. Penny stocks can also help you increase the net worth of your portfolio if you have very little money to spend. The first step in a long journey is a single step, and penny stocks might be your first step.
Also, by acquiring a block of stock at such a low price, you always know just where you stand with the risk involved since the lowest the stock can go is $0 and that isn’t far away. The top 10 penny stocks on the market, then, are a good entry point for the market and can result in increasing profits. Choosing a couple penny stocks to buy now can increase diversity in your portfolio while also reducing risk. Think of these stocks as a way of testing the market.
Overview: Stocks Under 10 Cents
Once you’ve decided to put some money at risk, research the penny stock market for companies with recent news and interesting products or services. Keep in mind that these stocks have an extremely speculative nature, so as a rule of thumb, don’t put any money at risk you can’t afford to lose.
Because of listing requirements, most penny stocks do not trade on the NASDAQ or other major exchanges, unless the company’s exchange-traded stock has recently failed to meet listing requirements. Trading in these assets is mostly done through the OTC Markets Group. Quotes for penny stocks have traditionally been listed in the “pink sheets,” a quotation publisher that originally published the quotes on pink-colored paper.
Keep in mind that due to the nature of these stocks, spreads can be wide with a minimum trading block of 10,000 or 100,000 shares in many cases, depending on the stock and the broker. Despite all the risks, the rewards can be considerable, with 1-day returns in the hundreds of percent in some cases.
Best Online Brokers for Stocks Under 10 Cents
Many online brokers accept orders for stocks under 10 cents. However, be aware that most brokers charge commission for OTC Market stock trades—whether they are among the top 10 penny stocks or not. Interactive Brokers offers Pink Open Market and OTC Market trading for selected stocks in its standard stock trading account and charges a fixed and a tiered rate.
Other online brokers with penny stocks to buy now include TD Ameritrade, Charles Schwab Corp., ChoiceTrade, TradeStation and Zacks Trade. Commissions vary for each broker, from no-commission to $0.01 per share. Some brokers tack on a surcharge while others have a share quantity minimum depending on the stock. Call your broker for more details on penny stock trading.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
SoFi’s mission is simple: to help reach clients like you reach their financial independence and realize their ambitions. SoFi knows that this independence comes from making decisions that help your money start to work for you in the long run. The brand helps individuals make these decisions through personal financial products such as personal loans, student loans and automated and active investing.
The brand additionally provides in-person experiences such as educational and networking events, personalized guidance from experienced financial planners and one-on-one advising with professional career coaches. SoFi’s services have been highlighted in outlets such as Forbes, Medium, and CNBC’s Make It.
- IPO Investing
- Mobile Investing
- U.S.-based customer service
- Highly-rated mobile app for iPhone and Android
- Only available in the U.S.
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Over 8,000 different stocks that can be sold short
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- No chat support
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
- Price earnings growth valuations
- Easily evaluate investment opportunities
eToro is a broker that offers access to over 25 of the world’s most popular cryptocurrencies, forex and over 1600 stocks. They have a few unique education and useability tools. Traders can begin buying and selling in as little as 10 minutes.
eToro’s unique CopyTrader feature allows new investors to “copy” the buy and sell orders of professional investors, while the company’s eToro Club feature provides investors with a range of additional education tools and resources.
- Traders looking for an easy-to-use platform
- Traders who want to practice their trades using a virtual account before entering the market
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
- High non-trading fees
E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.
- Active traders
- Derivatives traders
- Retirement savers
- Sophisticated trading platforms
- Wide range of tradable assets
- Exceptional customer service
- Limited currency trading
- Higher margin rates than competitors
- No paper trading on its standard platform
Features to Look for in Stocks Under 10 Cents
- Product and potential future earnings: Due to the minimum listing standards, many penny stocks might be hard to research. Research your potential purchases as much as possible so you know you’re investing in a real company with a viable product or service. You’ll also make sure there’s potential for decent future earnings per share. Keep in mind that the penny stock market is rife with scams, so learn to avoid them.
- Assets and liabilities: Study the company’s financials for assets and other tangibles that might make the stock an asset play, which means that stockholders might benefit from a liquidation of the company’s assets. If the company is laden with liabilities, stockholders may not be entitled to the proceeds of the sale of company assets.
- Liquidity: Because of their low price and speculative nature, penny stocks could be hard to sell once you’ve acquired a relatively large position. Liquidating a large position in an illiquid market could wind up costing you most of your profits. Dealing in the top 10 penny stocks with an active and deep market seems best if you plan on taking large positions.
Should You Invest in the Top 10 Penny Stocks?
The answer to this question depends on your goals as an investor or speculator and your pain threshold when it comes to risk tolerance. The first and foremost consideration before jumping into the penny stock market is if you can afford to lose your entire investment.
If you answered “no,” you’d probably be better off buying the stock of more established companies such as stocks under $20, stocks under $10 and stocks under $5 that meet your needs. With that said, profits from choosing penny stocks to buy now can significantly surpass gains in other investments if you pick the right securities.
Above all else, research mitigates risk. While you should not invest in anything that you feel uncomfortable with, research increases your comfort level. Over time, you will feel much more comfortable with investments that you might not have understood when you started — that could include penny stocks.
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