Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.
You don’t need thousands of dollars in the bank to get started investing. Just $50 can help you buy shares of companies with plenty of potential to expand in the future.
Every stock has to start somewhere — consider these top choices under $50 to begin your investment portfolio with stocks poised for future growth. We’ll also help you start investing earlier with a few of our favorite brokers and we’ll introduce you to a few factors you’ll want to consider when you select your investments.
Overview: Stocks Under $50
When most people think of investing, their minds immediately go to buying and selling shares of stock. But what exactly is a stock and what makes investing in stocks a good idea?
When you invest in a share of stock, you purchase a small portion of a publicly-traded company. While this doesn’t entitle you the same control and rights as the company’s CEO or board members, it does grant you voting rights on future executive changes and other public decisions in most circumstances. You can earn a return on your investment by waiting until your stock increases in value, collecting dividends paid out by the company that issues the stock, or both.
As the name suggests, stocks under $50 are stocks that have a per-share value of less than $50. This typically allows investors to purchase more shares of stock with their investment capital than larger companies. This can provide you with a greater level of growth potential for your portfolio — but these stocks do come with risks and drawbacks.
Most stocks under $50 are issued by small-cap corporations. Small-cap corporations usually have a total market capitalization of less than $2 billion but more than $300 million. You can calculate a company’s market capitalization by multiplying the total number of shares of stock outstanding by the company’s current price per share.
Although small-cap stocks do offer more room for return and profit when compared to larger cap competitors, investing in these types of companies can also result in multiplied losses if the value of your investments decreases. We recommend diversifying your portfolio with a blend of small-cap stocks with potential and large, well-established names on the market to protect your investment and limit the risk of loss in the event that a company you invest in goes bankrupt or sees a bad quarter.
Best Online Brokers for Stocks Under $50
Before you can begin investing in any type of stock, you’ll typically need to open an account with a broker. A broker is a financial company that provides you with access to an online trading platform that you can use to buy and sell shares. When you place an order through your brokerage platform, the broker will execute the order using your instructions, sometimes in exchange for a fee or commission.
The broker that you choose will determine how much you pay per trade, the type of platform you can use, the type of orders that you can place, the markets you can trade on and more. Taking a bit of time to compare brokerage platforms can ensure that you’re getting the best possible trading experience depending on your needs and level of experience as an investor.
Not sure where to begin your search? Explore a few of our favorite brokerage options below.
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 $50
With thousands of stocks under $50 on the market, how can you narrow down your options and choose which stocks you want to invest in? Though there is no foolproof method that you can use to select stocks that will increase in value, start by searching for these common characteristics.
- Trades on a major exchange: Companies that issue stock that trades on a major exchange (like the Nasdaq or NYSE) must meet a certain set of financial reporting criteria that are not required when trading on smaller exchanges. Protect your investment by investing in companies that trade on major exchanges when getting started.
- Trends toward debt reduction: Almost every publicly traded company carries some form of debt. Instead of looking at the dollar amount of debt carried by a company, take a look at how its debt is changing over time. Companies that are making progress toward reducing their debts are often in a much better position in terms of future growth when compared to companies that are actively taking on more debt.
- Upward trends in growth: Smaller companies are in a much more advantageous position when it comes to year-after-year growth. Take a look at each company’s revenue and earnings trends and search for investment opportunities with positive growth trends.
Adding Smaller Stocks to your Portfolio
No matter if you’re looking to take a long-term approach to investing or you’re searching for stocks that you can use to capitalize on market volatility, stocks under $50 can be a great complement to any portfolio. While you can often use this volatility to your advantage, these stocks can also present greater risks. If you do decide to invest in any type of stocks, be sure to do your due diligence and perform your own research before you buy or sell any asset.