Best Penny Stock Apps

The post Best Penny Stock Apps by Luke Jacobi appeared first on Benzinga. Visit Benzinga to get more great content like this.

Did you know most of our readers prefer Interactive Brokers as their best penny stock app?

Penny stocks are small company stocks usually traded over the counter for less than $5 per share. They are considered risky investments. Investors are attracted to the allure of purchasing a high number of shares with less money — with hopes of a large profit when the price jumps. Volatility is also a factor, allowing profits to be made in a considerably short time frame.

That is why investors are always on the lookout for the best way to invest in penny stocks. Penny stock apps can help investors navigate these potentially profitable stocks. With the rise of technology, there are now several apps available that make it easier than ever to trade penny stocks. These apps provide access to real-time data, stock analysis and trading capabilities.

You can buy penny stocks on your smartphone from a penny stock trading app. However, before you start trading penny stocks, choosing a mobile app that provides a convenient and cost-effective experience is necessary.

Quick Look: Best Apps for Penny Stocks

• Best for Active and Global Traders: Interactive Brokers
• Best for Futures Trading: TradeStation
• Best for AI Investing: Magnifi
• Best for Desktop Trading: E*TRADE
• Best for Beginners: Robinhood
• Best Overall Global Broker for Short Selling: TradeZero

6 Best Penny Stock Apps

Here are the apps Benzinga feels are the best for penny stock trading!

1. Best for Active and Global Traders: Interactive Brokers

Interactive Brokers stands out from the pack when it comes to resolute lowest-cost access the widest global range of products and markets. Known as the professional’s gateway to the world’s markets, active traders & investors from over 200 countries and territories invest globally in stocks, options, futures, forex, Bonds and funds from a single integrated account at the lowest cost.

Interactive Brokers offers enhanced price execution via IB SmartRouting and access to their powerful Trader Workstation, web, mobile and API trading platforms. Interactive Brokers is also Benzinga’s #1-rated broker for mutual funds, bonds, international, short trading and more.

IB clients also earn extra income from their fully owned shares of stock via their Stock Yield Enhancement Program, and they capture the absolute lowest margin loan rates in the industry, which underscores their mission to lower investors’ costs to maximize their returns.

Why We Love It: Interactive Brokers is an ideal platform for investors of all levels, catering to both novice and advanced users. Whether you are just starting in the world of investing or have years of experience under your belt, Interactive Brokers offers unique assets and tools that can be accessed at any time.

2. Best for Futures Trading: TradeStation

Designed for active traders, expert traders and professional asset managers, TradeStation is another ideal brokerage for penny stock trading. 

You can choose either the TradeStation Select or the TradeStation Go account. Both accounts charge no commission for mobile trades. But TS GO users have to pay a $10 commission for trades made on desktop computer. The TS Select account grants you access to mobile and desktop trading without added charges and is, therefore, the favorite among penny stock traders. However, to get started with TS Select, you need at least $2,000. Commission-free holds up to 10,000 shares, after which you’ll start paying $0.005 per share. 

For penny stock traders who can afford the price, the TradeStation app is highly efficient offering a great mobile experience and guaranteed access to valuable free data feeds. These qualities make it easy for you to research and enter trade within seconds. 

Why We Love It: TradeStation offers a wide range of tradable assets, including stocks, options, futures and cryptocurrencies, providing users with diverse investment opportunities. TradeStation’s competitive pricing structure, with commission-free stock and ETF trades, makes it a strong contender in the online brokerage space.

3. Best for AI Investing: Magnifi

Magnifi is a marketplace that allows you, as the investor, to use common brokerage tools and AI to make the best decisions for your portfolio. Because you can pull up all the information you need on a given asset, you can easily invest in the assets that will give you the results you deserve and better match your investment strategy.

Search for the investment options that meet your needs, invest in specific categories or scan for assets in a price range that’s affordable for you.

Best for long-term investors and those who require a bit of client support, you can also learn more about investing from this platform, utilize the AI-powered investing assistant, enjoy commission-free investing, try the mobile app and take advantage of over 15,000 possible investment options. This makes Magnifi a good place to trade for both seasoned and novice traders.

Why We Love It: Magnifi provides access to a community of like-minded investors, allowing users to share ideas and strategies. Additionally, Magnifi offers educational resources to help novice investors understand the risks and potential rewards of penny stock trading.

4. Best for Desktop Trading: E*TRADE

Penny stock traders using the E*TRADE platform enjoy zero commission charges and zero minimums. However, they’re charged $6.95 for over-the-counter stock trades, just like TD Ameritrade. Unlike TD, the fee reduces to $4.95 after 30 trades per calendar quarter.

E*TRADE offers multiple high-end trading platforms that include web, desktop and mobile apps that penny stock traders can choose from. Most traditional traders appreciate a Wall Street feel in a trading platform; if you’re one, you might appreciate the desktop version, Power E*TRADE. 

If you prefer the mobile app version, you have a choice between the simplified version of the Power E*TRADE or the regular E*TRADE app. Either way, the mobile app offers a unique and seamless trading experience for both professionals and newbie traders. 

Additionally, E*TRADE provides users with access to research reports from Reuters, TipRanks and others, making it easier to make investment decisions. It also has a knowledge section with a plethora of useful articles and information accessible to everyone — available if you have an account with it or not. 

Why We Love It: E*TRADE is well-suited for young adult investors due to its combination of user-friendly technology, educational resources and diverse investment options. The platform offers commission-free trading for stocks, ETFs and options, which allows newcomers to invest without high fees eating into their returns.

5. Best for Beginners: Robinhood

Robinhood is a commission-free trading platform that allows users to easily invest in stocks, exchange-traded funds (ETFs), options and cryptocurrencies. With its simple user interface, you can research, buy and sell assets with just a few taps on your mobile device. Robinhood also provides access to real-time data on stock market and educational resources, making it a great option for both beginner and experienced investors looking to grow their wealth through stock trading.

In addition to being able to trade the best penny stocks in Robinhood, the platform also allows you to trade regular stocks from well-known companies like Apple, Amazon, and Tesla. This gives investors the ability to diversify their portfolios and invest in companies that they believe in. With no commission fees, Robinhood makes it easy and affordable for investors to buy and sell stocks without worrying about racking up fees with each trade.

Why We Love It: Robinhood’s simple design and intuitive mobile app cater to tech-savvy younger investors, while its fractional shares feature enables users to invest in expensive stocks with small amounts of money.

6. Best Overall Global Broker for Short Selling: TradeZero

TradeZero is an excellent platform for those who need versatility and simplicity. You can trade on your desktop or a mobile app, and the platform makes it easy to invest in a wide range of assets—including penny stocks.

You can use the app for free, or you can register for a Pro account for $59 per month. The platform offers several affordable trading options, low fees and 24/7 customer service. You can take your trading from the desktop to your phone as you travel, and invest across the NYSE, AMEX, or NASDAQ, but remember, your penny stocks must list for more than $1 if you want to trade for free.

Why We Love It: TradeZero offers commission-free trading on U.S. stocks and ETFs, with no minimum deposit requirement, making it accessible for new investors. TradeZero provides advanced charting tools, real-time Level 2 quotes and access to pre-market and after-hours trading.

How Do Stock Apps Work for Penny Stocks?

When you use a stock app to trade penny stocks, remember that every app is different. Some apps may not allow you to trade penny stocks below a certain price. You must also look into how the app handles stocks that are delisted or fall to $0.

Remember, also, that every app supports different exchanges. If the stocks are on the OTC markets group, they may not be available through the app you have chosen. Also, review the guidelines the app uses if a stock you have already purchased IPOs, as it may not be available.

Otherwise, you can choose the stock you wish to buy, how many shares you want and complete your order within the app.

Best Features of a Penny Stock App

Before selecting an app to trade penny stocks, make sure you look for an app that offers qualities that meet your trading needs. Some of the features or qualities to look out for are. 

User Experience

The app must be easy to use and navigate. There should also be good customer support available. So, before choosing an app to trade penny stocks, check reviews from other users about their experiences with the apps. You can easily gauge user experience by reading customers’ testimonies on social media comment sections. 

Low Commissions and Charges

Trading apps that offer flat-fee trades instead of per-share rates are cheaper in the long run. It is best to avoid brokers that charge multiple fees like a monthly platform fee, fees for data or have monthly minimums if you want to save.

Access to a Large Number of Penny Stocks

Unlike regular shares listed on popular exchanges, a penny stock is mainly traded over the counter. It’s a plus to choose a broker that allows you to trade over-the-counter penny stocks. 

How to Buy Penny Stocks

Once you have selected a reputable trading app, here are steps for buying penny stocks using.

1. Create and Fund Your Account

Download the app, sign up, and complete the verification process. This usually involves providing personal information and identity documents. Once verified, deposit funds into your account using bank transfer, debit card or other available methods.

2. Research Penny Stocks

Use the app’s research tools or external resources to find potential penny stocks. Look for companies with strong fundamentals, growth potential and positive news. Be aware that penny stocks are highly volatile and risky.

3. Set Up Watchlists

Create watchlists within the app to monitor potential penny stocks. This helps you track price movements and stay informed about market trends.

4. Place a Buy Order

Once you’ve identified a penny stock to purchase, navigate to the stock’s page in the app. Select “Buy” and enter the number of shares you want to purchase or the dollar amount you wish to invest.

5. Choose Your Order Type

Select between market orders (executed at current market price) or limit orders (executed only at a specified price or better). Limit orders are often preferable for penny stocks due to their volatility.

6. Review and Confirm Your Order

Double-check all details of your order, including the stock symbol, number of shares and total cost. Confirm the order when you’re satisfied.

7. Monitor Your investment

Keep track of your penny stock’s performance using the app’s portfolio tools. Set up price alerts if available to stay informed of significant price movements.

8. Develop an Exit Strategy

Decide on your profit targets and stop-loss levels. Be prepared to sell if the stock reaches your predetermined levels, as penny stocks can be highly unpredictable.

Penny Stock Movers of the Day

If you are undeterred by the high-risk potential involved in trading a penny stock and you’re looking to trade, we’ve compiled the list of top penny stock gainers and losers for the day for your perusal.

How Do Penny Stocks Work?

Penny stocks trade pretty much like other stocks but with added risks. As a result of their low-price shares and small market cap, investing in penny stocks is highly speculative. Since they are not required by law to file information with the Securities and Exchange Commission, there is usually little information about them. 

The absence of information might lead you to make an investment decision based on rumors or guesswork. Penny stocks are most often referred to as illiquid investments since fewer people trade these shares. The lesser liquidity means lesser chances of finding a buyer. You can therefore be forced to sell at an unfavorable price.  

Furthermore, penny stocks are a haven for stock manipulators. Stock manipulators buy large quantities of a stock intending to inflate the prices through false statements and half-truths and sell when prices increase.   

Pros and Cons of Penny Stocks

Before deciding to jump in or avoid penny stocks, it’s good to understand the pros and cons of such an investment to make a more informed decision. Some of these are:

Pros

Very cheap: At $5 or less, penny stock shares are very cheap. You can buy a large number of shares for little money. For example, if a company’s share price is $0.50 per share, you can buy as many as 1,000 shares for just $500. If the share price jumps to $2 per share, you will gain $1,500 profit on 1,000 shares. 

High volatility making quicker returns: Because of high volatility, penny stocks have the potential to offer high growth in a very short time. Meanwhile, regular stocks on Nasdaq or NYSE could take the next 1, 2 or, in some cases 5 years before you can see growth.

Cons

Low-quality companies: Most penny stock companies are low-quality companies. They are unprofitable and often produce huge losses. Some also have a product that is out of demand with numerous competitors.

Easy to lose money: Penny stocks are very volatile, and though investors can gain money quickly, they can also lose it quickly.  

High rate of scams: Penny stocks are prone to “pump-and-dump scam.” In a pump-and-dump scam, fraudulent traders artificially inflate the price of penny stocks and sell out for a profit.

Are Penny Stocks a Good Investment?

Statistically speaking, you are more likely to lose money trading penny stocks. Most penny stocks are traded based on speculation as there is little or no information about them. Penny stocks are therefore prone to manipulation and fraud. However, despite the risk, penny stocks can deliver huge returns and fast growth. 

To minimize your risk of being defrauded, you must tread with caution and do due diligence through adequate research on the best penny stocks to invest in. Be especially mindful of paid promotions through emails. 

Frequently Asked Questions

The post Best Penny Stock Apps by Luke Jacobi appeared first on Benzinga. Visit Benzinga to get more great content like this.