Penny stock investing offers investors wonderful opportunities to buy into companies in their early stage, and at their cheapest price point.
Defined loosely by the Securities and Exchange Commission as any stock that trades for less than $5 per share,
Since there is less liquidity with these assets, meaning lower than average trading volumes, the price of a penny stock can fluctuate violently in a given period.
With so much extra risk involved, Fidelity, and similar brokerages, require its customers to acknowledge their understanding of the specific risks associated with penny stock investing, before they may begin trading.
In this article, we breakdown:
- What is
Fidelitydo penny stocks;
Fidelitygood for penny stocks;
- What to consider when buying
FidelityInvestments’ penny stocks;
- And how to buy
penny stockson Fidelity
For a deeper understanding of
Established in 1946,
Now a massive financial services firm, amassing a total customer asset base of $6.5 trillion,
With such a large variety of high-quality services and investment vehicles,
From a brokerage standpoint,
Whether you are looking to day trade or invest for the long run, there are a variety of investment tools available including analyst insights, market commentary, stock chart indicators, and more.
If you are someone looking for a brokerage platform with all of the bells and whistles and is valuable for both experienced and beginner traders, consider opening an account with
Fidelity do penny stocks?
However, before you can begin buying
To do so, simply head to the
This is a one-time process, and once completed, you will now have full access to all of the
It is important to note that while
For those wondering the advantages between investing in smaller businesses verses large companies, check out our article on What is Small Cap vs. Large Cap
Fidelity good for penny stocks?
Fidelity is one of, if not, the best online brokerage platforms available on the market today when it comes to trading
With zero commission-free trading on
As such, you as an investor keep your costs to a minimum when making investment decisions, and acquire more bang for your buck when choosing to cash out on your gains.
While most brokerages do follow a similar policy for larger stocks these days, many of the most reputable brokers add additional fees, up to $6.95, because of the risk involved when making these investments.
But if you are an investor intending to seriously trade
Here is what some of the top brokerages charge on
- Fidelity: $0 per trade.
- TD Ameritrade: $6.95 per OTCBB trade.
- Charles Schwab: $6.95 per OTCBB trade.
- TradeStation: $0 per trade (up to 10,000 shares)
- Interactive Brokers: $0.0035 per share
That being said, fewer stocks available for trade is not necessarily a bad thing because it ultimately depends on the company you are looking to invest in.
What to consider when buying
Fidelity Investments’ penny stocks
Before setting up your brokerage account with
While zero commission fee trading is certainly advantageous, it is important to evaluate all factors at play when selecting a brokerage.
Here are some questions you should ask yourself when conducting your due diligence:
- What am I trying to accomplish with my investments: growing or preserving wealth?
- How often will I be trading: daily, monthly, or yearly?
- What kind of assets am I wanting to invest in?
- What is my investment horizon: 3 months or 20 years?
- Am I seeking guidance from a professional when it comes to investment decisions?
- What kind of account am I looking to open: TFSA, RRSP, IRA?
- What are the Account minimums?
- What are the brokerages’ fees and charges?
- What kind of investment research tools do they offer?
- How is their customer service?
After asking yourself these questions and any more you might be wondering, you should have a clearer understanding of which brokerage is the best fit for your needs.
And now, it is finally time to learn how to buy
If you are looking to improve your odds when investing in
How to buy
penny stocks on Fidelity
So you have finally reached the decision that
Without further adieu, here is the Five Step process for learning how to buy
As a reminder,
When buying a penny stock on
1. Once you decide on a penny stock, find it using the search bar.
If you are looking for new ideas, you can also use
2. Then, click on the stocks profile page and click the trade button.
3. Set the Action to “Buy”, and enter the number of shares you want to purchase using the Quantity window.
4. Next, determine whether you would like to execute a market or limit order.
A market order executes the trade at whatever price is available when the transaction is made. We strongly advise against a market order for penny stock trading, because due to the limited liquidity, the difference between the bid and ask price can be significant, leaving you buying or selling a stock at a far higher or lower price than you expected.
A limit order executes the trade only if it is at or below the desired price point; the trade will not be executed if the price fails to fall below the Limit Price. A limit order protects an investor from the risks associated with placing a market order, while also offering investors the chance to place a low bid on thinly traded equities, in the hopes of benefiting from a flash crash.
Note, there is a “Time in Force” menu whereby you can decide how long you are willing to wait for the order to be filled, with the maximum time being 180 days.
5. Lastly, click the Preview Order button to verify all of the information is correct, and finally place the order when you are satisfied.
Congratulations, you are now the proud owner of a new penny stock.
For more information on trading