Investing in Penny Stocks?
I'm trying to practice investing with penny stocks. I'm looking for a investment profile company that has NO MINIMUM deposit. Ameritrade, scotrade, fxtrade, etc asks for at least 500 dollars in deposit. I have more like 20 dollars in my paypal to spare so are there any companies that allows 0 dollars in deposit?
@Wanda, "own capital"? Just wondering. What do you mean by that. If not my own money, then who's? I doubt Bill Gates is going to let me invest on his money.
- Common SenseLv 78 years agoFavorite Answer
Penny Stocks Investing is the last place for a novice investor. Even if there was no minimum for any broker... the trading costs would eat up 50%-100% of your investment between buying and selling (based on $20 that you mentioned).
It takes about 3-5 years to learn how to swing or day trade. Your $20 would be better used by buying a book on trading. Penny Stock Trading can be the hardest to learn & the hardest to make money in (over time). Consider Penny Stock Trading after about 5 years of successful trading of stocks over $5. Even then..... it's rarely a good idea.
- MLv 68 years ago
It will be difficult to make a profit even if you can find a company with no minimums. The challenge for you will be brokerage fees. The average broker charges around $5 to $10 per trade, so your buy order would wipe out half of your savings and the sell order would wipe out the other half.
This is why brokers require a minimum of $500 or $1000 or more. There are actually laws against a broker charging more than 5% in commissions per trade. This is really problematic if you only have $20 to invest.
Consider opening up a practice account through a website like howthemarketworks.com. You will get fictitious money and the opportunity to practice trading penny stocks based on real companies, ticker symbols, and quotes.
- Anonymous3 years ago
1Source(s): Make Money Investing in Stocks http://teres.info/TheTradingCode
- DavidLv 78 years ago
Sharebuilder, etrade, optionsexpress are the brokers with low or no minimum.
Penny stocks are horrible long term investments. Novice investors make the very critical mistake that a penny stock is a company that is just starting out or immature and just waiting to bust out. In fact, most penny stocks are priced so cheaply because the value and fundamentals of the underlying company is basically junk. The companies normally have very high debt, negative retained earnings, bad management, etc. Most penny stock companies will not be around for the long term as they are mostly smaller cap stocks, which have an extremely high long term failure rate. A penny stock is MUCH more likely to lose all of its value over the long term, than to make money. They can be fun to play with using small amounts of money, but NOT a very wise investment tool.
You might want to read this article about penny stocks, they are highly speculative and risky.
http://www.pennynetwork.net Penny stock newsletter
http://simulator.investopedia.com/home.aspx (simulator, and finance terms and definitions)
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- 4 years ago
How can you cash in on the potential growth that penny stocks have to offer? Learn here https://tr.im/pennystocktrading
There are three things you'll want to look for when picking a penny stock to make sure that you don't get penny stuck: Underlying business, financials, and footnotes.
When it comes to penny stocks, a company's underlying business is even more important than it is in exchange-traded stocks. That's because the penny stock world is home to "shell" companies that are legally incorporated, but don't have any business operations
- 5 years ago
Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million. They are sometimes referred to as "the slot machines of the equity market" because of the money involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow this guide you will learn the most
efficient strategies https://tr.im/WLRGj
- Anonymous8 years ago
If you make some profit from good stock invest in penny stock for long term view it is better idea but own capital invest in penny stock it is really bad.
- 3 years ago