How to Buy Penny Stocks

Penny stock is a common stock that trades at a very low share price. Where to buy penny stocks? Penny stocks usually do not trade on the major stock exchanges such as the National Association of Securities Dealers (NASDAQ), AMEX, and the New York Stock Exchange (NYSE). Instead they are generally traded at Over-the-Counter Bulletin Board (OTCBB) and Pink Sheets, LLC.

You can buy penny stocks via a full service brokerage or using a discount brokerage account. Full service brokerages are typically more expensive because they fully service your account through investment advice and professional guidance by discussing your investment goals with you and even suggesting which stocks to buy and when to sell. This is a good choice for novice penny stock investors or those with limited knowledge. Some of the most famous full service brokerage firms include Morgan Stanley, JPMorgan, and Merrill Lynch.

A discount stock broker is cheaper than the full service stock broker. This type of brokerage carries out buy and sell orders at a reduced commission compared to full-service brokerage, but you need to handle everything yourself with online access or telephone access to your account. There are many good discount brokerage firms such as TD Ameritrade, E*Trade, and Interactive Brokers.

* Next: Best Penny Stock Brokers