So you want to trade penny stocks but not actually interested to pay the brokerage to a professional. In fact, if you are ready to put in the effort, buying and trading penny stocks on your own can be more profitable and even entertaining at some point. Here is a step by step guide to help you on how to buy penny stocks without a broker.
Investigate a company thoroughly before buying their stock
Penny stocks are generally offered by the small, emerging companies and hence the risk involved in this case can be high, particularly if you are planning to buy a good number of stocks to gain substantial profit. So, before you purchase the stocks, study the company minutely. Examine the financial health of the company. You can find information on sites like Yahoo Finance or Google Finance. Information can also be available on OTC Board or National Quotation Board. There are also different online Penny stock newsletters that can be helpful to provide information about the small emerging stocks and IPOs.
Get an account with an online brokerage service
To buy and trade penny stocks without a physical broker, you need to register with an online brokerage service that works on penny stock investing. These services will do the purchase and trading as per your instructions and will also help you to keep a constant eye on the purchased stocks.
Buy the stocks and start trading
Once you have completed the above steps, it is the time to buy the penny stocks and start trading. Place the purchase orders under “Limit” orders. This will enable you to have full control on the value of the transactions.
Keep a constant check on the price of your stock
When it comes to penny stock trading keeping a constant check on the price of the stocks is vital. The professional and successful people in this line often spend hours every day on the computer following the stocks. Penny stock trading means trading within a moment’s notice, even for small profits and hence you need to be always ready.
Before you start penny stock trading on your own be fully aware about the risk involved in this type of trading and never opt for penny stocks as a long term investment option, because they are not reliable and are aimed to be traded even for small profits.
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