That’s why it’s worth checking a broker’s stock list before you sign up for anything. Some will provide more than others and this is generally because of liquidity issues.Ī lot of penny shares have very low trading volumes, which can make it harder for brokers to offer them. Most investment accounts that provide access to the stock market let you buy penny stocks. But do not expect the same standards that you would from bigger UK stocks, like BP or Vodafone, trading on the LSE’s main market. This is not something to be overly anxious about - you still have to meet several requirements before you can trade on AIM. One thing to be aware of is that AIM-listed stocks do not have to meet the same listing standards as companies that trade on the LSE’s main market. There are some big winners trading on the exchange but there have also been some serious duds in the past too. Most UK penny stocks list on the London Stock Exchange’s (LSE) Alternative Investment Market (AIM).ĪIM is renowned for being a bit of a wild west.
This inability (or unwillingness) to meet certain standards might be a red flag, so be very careful if you do decide to buy penny stocks on the OTC market. That’s because the main reason you can't buy OTC penny shares on an exchange is the companies issuing them usually can’t, or don’t want to, adhere to the regulatory standards imposed by exchanges.
They tend to carry a higher level of risk with them. OTC stocks are purchased directly from brokers and other financial services businesses. One other way to access US penny stocks is via the over the counter - or ‘OTC’ - market. In the US, both the Nasdaq and New York Stock Exchange offer penny stock trading.īecause penny stocks generally have lower trading volumes, some brokers, particularly those outside of the US, will not offer all of them. OTC penny stocks vs NYSE/NASDAQ penny stocks There are penny stocks to buy on most exchanges but the most popular ones tend to trade on UK and US exchanges. And you have the fun task of figuring out which is which. That doesn’t say anything about whether or not they are good businesses. In reality, there are thousands of firms listed on exchanges across the world and many of them are pretty small and not well known. We tend to think of big names, like Facebook or Tesla, when it comes to stock trading. On the one hand, a penny stock is just a share that costs less than £1 in the UK or $1 in the US.īut it’s also shorthand for shares in smaller, less well-known companies.
PENNY STOCKS BEGINNERS GUIDE HOW TO
In this guide we’ll run through how to invest in penny stocks so you can get a better idea of how to approach them.īefore we get started though, a brief introduction may be needed - what are penny stocks or penny shares? There are still plenty of penny stocks to buy that offer good value. It doesn’t help that many of the penny shares UK investors buy are often treated like racehorses at a bookies’ office.īut like all stereotypes, the idea that all penny stocks and shares are for speculative punts or Wolf of Wall Street scammers isn’t true. They may be cheap but they’re often volatile and it can be hard to predict what their price is going to do. Penny stocks don’t have the best reputation.
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