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Finance

Can You Use Robinhood to Buy Penny Stocks?

The Robinhood platform allows you to trade thousands of stocks and a diverse range of ETFs and cryptocurrencies. Robinhood stocks range from those costing thousands of dollars per share to those costing less than $5 a piece. The latter are Wall Street calls penny stocks. Robinhood’s penny stock list features companies in diverse industries and at different price points. Notably, penny stocks are typically associated with small or microcap companies. But you can also find some big companies among penny stocks.

Does the Robinhood platform have penny stocks?

Robinhood’s online brokerage platform has become the to-go-place for retail investors and novices in the stock market. Robinhood’s greatest appeal is that it is free; hence it has lowered the barrier to entry to stock market investing. Millions of Americans, mostly the young, have adopted Robinhood investing to grow their wealth.

You can invest in penny stocks on Robinhood. However, the Robinhood platform doesn’t offer everything in the penny stock world. For example, the majority of penny stocks trade over the counter or on OTC markets. But Robinhood only supports the major stock exchanges. Therefore, Robinhood penny stock list limits your selection to stock on the NYSE and NASDAQ exchanges. That Robinhood offers only a limited selection of penny stocks may be suitable for Robinhood investors.

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Penny stocks investing comes with certain risks.

Whether you are looking at Robinhood penny stocks or the OTC markets universe, it is crucial to understand that penny stock investing is typically a risky bet, and beginners need to approach it carefully. 

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Whether you are looking at Robinhood penny stocks or the OTC markets universe, it is crucial to understand that penny stock investing is typically a risky bet, and beginners need to approach it carefully. 

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For example, a penny stock may be cheap to acquire, but you may be stranded with them when you want to sell because of a shortage of buyers. Moreover, penny stock prices can be volatile. But high price volatility also means penny stock investing can generate huge returns if done correctly. 

Indeed, the cheap price and potential for huge returns are the reasons some investors seek out penny stocks. Robinhood penny stock investing would look even more appealing for retail investors looking to maximize their returns because the platform charges no commission on trades.

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To minimize risk, do your homework before investing in penny stocks. If you have decided to invest in Robinhood penny stocks, look for stocks of companies in good standing. Moreover, seek penny stocks of companies that generate revenue and are profitable. 

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Luckily for Robinhood penny stock investors, the platform offers filtering tools to help you pick the right stocks. For example, you can sort Robinhood penny stocks by price, market cap, and sector. You can also read company profiles and access brief earnings histories on the Robinhood smartphone app or website. 


View more information: https://marketrealist.com/p/robinhood-penny-stocks/

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