How to buy penny stocks: tips to get you started (2024)

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. 

Professional clients trading spread bets and CFDs can lose more than they deposit.

Options and futures are complex instruments which come with a high risk of losing money rapidly due to leverage. They’re not suitable for most investors. Before you invest, you should consider whether you understand how options and futures work, the risks of trading these instruments and whether you can afford to lose more than your original investment.

Trading stocks and shares ‘on margin’ within a US options and futures account – meaning that you only finance part of the cost of acquiring a position in a security – carries additional risks over buying securities on a fully funded basis and may result in losses exceeding your original investment. Trading on margin will also result in additional costs to you as the investor and any securities purchased using margin may be held as collateral by the lender, restricting both your rights as shareholder, and your ability to use the securities until the margin trade is closed. You should familiarise yourself with these risks before trading on margin.

The value of shares, ETFs and other ETPs bought through a share dealing account, a US options and futures account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results. Some ETPs carry additional risks depending on how they’re structured, investors should ensure they familiarise themselves with the differences before investing.

Share dealing and IG Smart Portfolio accounts provided by IG Trading and Investments Ltd, CFD accounts and US options and futures accounts are provided by IG Markets Ltd, spread betting provided by IG Index Ltd.   

IG is a trading name of IG Trading and Investments Ltd (a company registered in England and Wales under number 11628764), IG Markets Ltd (a company registered in England and Wales under number 04008957) and IG Index Ltd (a company registered in England and Wales under number 01190902). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. IG Markets Ltd (Register number 195355), IG Trading and Investments Ltd (Register Number 944492) and IG Index Ltd (Register number 114059) are authorised and regulated by the Financial Conduct Authority.   

The information on this site isn’t directed at residents of the United States, Belgium or any particular country outside the UK and isn’t intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

How to buy penny stocks: tips to get you started (2024)

FAQs

How to invest in penny stocks for beginners? ›

How to trade penny stocks
  1. Open a live trading account. ...
  2. Fund your account. ...
  3. Research to find the right stocks for you. ...
  4. Decide if you want to buy or sell. ...
  5. Manage your risk. ...
  6. Determine your position size and place the trade. ...
  7. Monitor your position and close your trade.

What is the best strategy for penny stocks? ›

In most cases, a good strategy is to maximize the leverage of the invested capital by buying as many shares as possible. A move of only a few pennies when multiplied by a large position can equal a substantial gain in a relatively short period of time.

What are the top 5 penny stocks to buy? ›

Top Fundamentally Strong Penny Stocks – 2024
NameSub-SectorMarket Cap (Rs. in cr.)
Ducon Infratechnologies LtdIT Services & Consulting₹202.23
Toyam Sports LtdDiversified Financials₹194.76
Srestha Finvest LtdDiversified Financials₹176.30
Goyal Aluminiums LtdIron & Steel₹129.32
6 more rows

What is the best way to research penny stocks? ›

How to Research Penny Stocks to Trade
  1. Have a good penny stock scanner such as Trade Ideas.
  2. Scan pre-market for gapping stocks.
  3. Look for news catalysts.
  4. Take a look at float to see how volatile price action is.
  5. Also, make sure to be aware of short float.

What is the best stock under $1? ›

Best Penny Stocks Under $1 to Buy Today
  • AREB-3.23% AREB - NASDAQAmerican Rebel Holdings Inc. Volume: 235242. ...
  • ISPC+3.20% ISPC - NASDAQiSpecimen Inc. Volume: 355843. ...
  • KSCP-4.35% KSCP - NASDAQKnightscope Inc. Volume: 1.67M. ...
  • DNA-3.58% DNA - NYSEGinkgo Bioworks Holdings Inc. ...
  • CDT-4.81% CDT - NYSEConduit Pharmaceuticals Inc.
Jul 16, 2024

How do people make money on penny stocks? ›

Once you find the stocks you want, buy where you think other traders will enter, know when to sell penny stocks, take quick profits, and adjust the stops for small gains that add up over time. You may get lucky and have a big win on occasion, but most of your money will come from these smaller trades.

What are the fastest growing penny stocks? ›

30 Symbols
  • NIO3.820.15% NIO Inc.
  • LCID3.150.24% Lucid Group, Inc.
  • MPW4.790.20% Medical Properties Trust, Inc.
  • TLRY1.850.10% Tilray Brands, Inc.
  • WULF3.880.54% TeraWulf Inc.
  • OPEN1.680.08% Opendoor Technologies Inc.
  • BITF2.300.41% Bitfarms Ltd.
  • DNA0.290.01% Ginkgo Bioworks Holdings, Inc.

Why do most penny stocks fail? ›

Lack of liquidity: Penny stocks are often illiquid, meaning it can be difficult to buy or sell your shares quickly without impacting the price. Unprofitable: Many penny stocks represent a stake in a company that has not and will not generate earnings for its shareholders.

How do you pump and dump penny stocks? ›

The Scheme

An investor will buy a large position in a pump-and-dump penny stocks company and need to increase the price. They can do that through newsletters, chat rooms, websites, and message boards. This drives up the interest in the stock, and it's so exciting you want to get in before the price skyrockets.

What is the greatest penny stock of all time? ›

Top 10 Most Successful Penny Stocks in History
  • AAPL+1.73% AAPL - NYSEApple Inc. ...
  • F+4.71% F - NYSEFord Motor Company. ...
  • HEAR+3.44% HEAR - NYSETurtle Beach Corporation. ...
  • MNST-11.81% MNST - NYSEMonster Beverage Corporation. ...
  • PLUG-0.48% PLUG - NASDAQPlug Power Inc. ...
  • AMD+4.84% ...
  • MED-2.31% ...
  • NVAX+5.79%

Which stock will boom in 2024? ›

Best stocks in 2024
S.No.NameCMP Rs.
1.BLS Internat.389.90
2.Black Box545.40
3.RHI Magnesita597.65
4.Gujarat Gas610.70
22 more rows

How many penny stocks should I buy? ›

Some professionals recommend that you devote no more than 10% of your individual stock holdings to penny stocks. It's also important to understand your risk tolerance. Generally speaking, the higher your risk tolerance, the more equipped you are to take on the risk that can come with investing in penny stocks.

What is the best penny stock strategy? ›

Keep a long position. I.E. don't sell short. Penny stocks are extremely volatile and if you end up on the wrong end of a short position your losses can be pretty significant. When you purchase a stock, your losses are limited to your investment.

How to find penny stocks for beginners? ›

Finding a website that lists penny stocks is only a starting point. A good place to start is Wall Street Survivor's Investing Ideas page which lists various penny stocks. Another option is to use MSN's Stock Screener which allows you to filter stocks based on desired criteria like price per share.

What is the best scanner for penny stocks? ›

Try them all and see which one works best for you!
  1. StocksToTrade — Best Overall Penny Stock Screener. ...
  2. Benzinga Pro — Best Penny Stock Screener for News Scanning. ...
  3. TD Ameritrade — Best Penny Stock Screener for New and Advanced Traders. ...
  4. MarketWatch Stock Screener — Best Web-Based Penny Stock Screener.
May 15, 2024

Are penny stocks illegal? ›

Penny stocks are legal, but they are often manipulated. Penny stocks get their name because of their low share price. Any stock trading below $5 a share is generally considered a penny stock.

What is the minimum for penny stock? ›

In the past, penny stocks were considered any stocks that traded for less than one dollar per share. The U.S. Securities and Exchange Commission (SEC) has modified the definition to include all shares trading below five dollars.

How much money do day traders with $10,000 accounts make per day on average? ›

How much money do day traders with $10000 accounts make per day on average? On average, day traders with $10,000 accounts can make $200-$600 per day, with skilled traders aiming for 2%-5% returns daily.

What is the most successful penny stock ever? ›

Top 15 Most Successful Penny Stocks in History
  • Nike (NKE)
  • NVIDIA (NVDA) ...
  • Monster Beverage Corporation (MNST) ...
  • Tractor Supply Company (TSCO) All-Time Return: +54,978% ...
  • Axon (AXON) All-Time Return: +48,911% ...
  • ASML (ASML) All-Time Return: +30,001% ...
  • Netflix (NFLX) All-Time Return: +27,719% ...
  • Tesla (TSLA) All-Time Return: +11,641% ...
May 8, 2023

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