Trade penny stocks with these top-listed apps

Stock trading is one of the best options for investments among investors. Before trading apps, it becomes hard for investors to invest in stocks as they need to locate nearby brokers for taking trades. 

But after the digital revolution, the way of trading stock has entirely changed. Now users can take trades and invest straight from their phones and PCs with brokers’ digital platforms.  

The prices of stocks are already high, which makes penny stock trading apps more popular. But what are these penny stocks? Can we trade penny stocks with regular trading apps? Get all the answers from this blog.  

What are penny stocks?

Penny stocks, equities valued at less than $5 per share, are a dynamic yet high-risk segment of the financial market. Traded mostly on OTC markets or electronic platforms, these stocks often represent small, speculative companies. Their appeal lies in the promise of significant gains, yet investors face the challenge of potential risks.

A key concern here is: 

• The absence of regulatory compliance exposes investors to potential misinformation about a company’s financial health or risks. 
• The low trading volume even worsens this, leading to wide bid-ask spreads that hinder optimal trade execution. 
• Furthermore, penny stocks are a breeding ground for manipulation and fraud, with scammers employing tactics such as pump-and-dump schemes and insider trading.

The application of high leverage and margin trading amplifies risk, allowing investors to control more shares than their cash reserves permit. This, coupled with susceptibility to price manipulation by institutional traders, makes penny stocks a volatile and treacherous investment arena. As investors choose this path, due diligence and risk management become paramount.

After knowing penny stocks, you may wonder why apps have become the most popular way of doing stock trading. Let’s discuss it in the next section.

How does penny stock trading work?

Engaging in penny stock trading demands a strategic approach to mitigate inherent risks. Here are the following steps:

1. Select a Reputable Broker

Identify a broker facilitating access to OTC markets or electronic platforms where penny stocks are traded. Leverage stock screening tools like OTC Markets or Finviz to filter stocks based on criteria such as price, volume, and market capitalization.

2. Thorough Research

Dive into exhaustive research on the chosen company’s financial health. Examine earnings reports, balance sheets, and cash flow statements. Utilize online databases like Yahoo Finance or MarketBeat for financial data and news updates, and monitor the company’s official website and social media for crucial announcements.

3. Determine Investment and Risk Levels

Establish the amount you’re willing to invest and your risk tolerance. Given the volatile nature of penny stocks, invest only what you can afford to lose. Craft a clear exit strategy and implement a stop-loss order to mitigate potential losses.

4. Execution of Orders

Utilize your broker’s platform to execute buy or sell orders based on your market outlook. Buy at a lower price if you anticipate an upswing and sell at a higher price if you foresee a downturn. Be mindful of potential challenges due to limited market participants.

5. Continuous Monitoring and Adjustment

Keep a vigilant eye on your penny stock investment’s performance, comparing it against similar holdings in your portfolio. Stay abreast of relevant news and events impacting the company or its industry. Should your position become excessively risky or unprofitable, consider closing it strategically by selling for profit or minimizing losses.

Market insight for penny stock 

Penny stocks, typically priced below $5 per share, boast a collective market capitalization of less than $300 million. According to a report, in 2021, there were approximately 2,000 penny stocks listed with a cumulative market cap of around $200 billion, illustrating the vast terrain these stocks cover.

1. Global Investor Landscape

While pinpointing the exact number of global penny stock investors remains elusive due to varying definitions and measurement methods, estimates suggest millions of retail investors engage in online penny stock trading. Regions like China and India stand out as hotspots, attracting investors with the promise of high returns, minimal entry barriers, and diversification opportunities.

2. Bullish and Bearish Sentiments

Penny stocks evoke a mixed sentiment, with proponents lauding their potential for growth and value creation, particularly in emerging markets and innovative sectors such as cannabis, 5G, artificial intelligence, and biotechnology. Conversely, skeptics caution against the inherent risks, citing fraud, manipulation, volatility, liquidity challenges, and regulatory uncertainties.

3. Global Market Share Dynamics

Estimating the global market for penny stocks at approximately $1 trillion in 2020, China claimed a substantial 40%, followed by the U.S. at 20% and Europe at 15%. The market’s decentralized nature poses challenges in precise measurement, reflecting diverse levels of development and regulatory frameworks across regions.

4. Predictions for 2024 and 2030

Experts’ foresight into the penny stock market’s trajectory is diverse. Some anticipate steady growth fueled by increasing investor awareness, while others foresee challenges arising from heightened competition, stringent regulations, and macroeconomic uncertainties. Innovations in blockchain, cloud computing, and quantum computing are expected to disrupt the landscape.

5. 2030 Projections – A Glimpse into the Future

Venturing into 2030, predictions offer intriguing insights. Morningstar’s report emphasizes cannabis-related companies like Green Thumb Industries, Sundial Growers, and Tilray. InvestorPlace recommends Snap Inc, Unity Software, and Shopify. InvestorPlace’s AI predictions identify Zomedica Corp and Sundial Growers as potential high-growth penny stocks.

6. Demographic Snapshot of Penny Stock Investors

Drawing from NASDAQ’s report, the average age of U.S. penny stock investors was 38 in the past year. Male investors constituted 54%, while females comprised 46%. The educational breakdown revealed 67% hold a college degree or higher, showcasing a relatively educated investor base.

7. Global Investor Hubs

While precise measurements of active investor locations remain elusive, China emerges as a dominant force, commanding 40% of the global market share. The U.S. trails at 20%, followed by Europe at 15%. Other active regions encompass India, Canada, Australia, and South Africa.

List of the best penny stock trading apps

These are the list of top best apps from which you choose any app that meets your trading needs for a better trading experience. You can check the trading requirements of all these apps like minimum deposit, trading fees, commission rate, etc.  

1. Charles Schwa

The app has won many industrial awards. It was founded in 1971 and has provided the overall best stock trading experience to its customers. 

Charles Schwa improved the brand by focusing on low-cost investing, technological innovation, excellent customer service, and world-class research and education resources needed for every penny stock investor. It’s our first pick within the top list of apps to buy penny stocks.  

Also, this was the first one that managed to offer discount brokerage. It provides access to its full range of services, including its StreetSmart platforms and high-end stock screeners for penny stock trading, by providing access to penny stocks traded on multiple exchanges.  

2. Robin Hood

Robin Hood’s valuable services, such as the zero trade commission and its wide variety of investment options, are loved by many investors. It was founded in 2013 and is considered a simple and accessible platform for trading penny stocks.

Talk over its other investment options; it offers to trade in gold, cryptocurrencies, ETFs, options, etc. But it lacks tools and resources which can help traders in many ways. Instead, it just comes with its basic market research tools and features.

This broker doesn’t require any minimum deposit to set up an account. You can upgrade your trading account in Robinhood by taking its monthly subscription of $10 to advanced trading tools and features.

 3. TD Ameritrade

The trading platform “TD Ameritrade” was started in 1975. It manages to offer high-tech trading tools and clean app navigation that makes users’ trading experience easier and better.

You can access best-in-class trading tools, real-time streaming data, and other trading services. Its web and mobile app trading platform has the same trading tools and features that provide users with a better cross-platform trading experience. 

Also, you can set up your account without needing any minimum deposit amount. It offers commission-free trading on non-OTC stocks. The only drawback here is that it charges $6.75 per trade for OTC stocks.

This app has two versions:

1. One for beginners traders, and 
2. Another for experienced traders

It comes with its regular TD Ameritrade app with basic features for beginners. While for advanced and experienced professional traders: it comes with its award-winning premium thinkorswim app. 

These apps let you trade and monitor your stocks with live charts and access many trading tools. This can help you research a company’s value for making better decisions on your penny stocks trades.

4. Ex trade

It is one of the oldest brokers in the stock trading market. It was founded in 1982 and acquired by Morgan Stanley in 2020. Its app has advanced trading tools and features that traders need during trading penny stocks. It also provides research reports from Thomson Reuters, TipRanks, and others. 

Like TD Ameritrade, this app also has two versions: —the regular E*Trade app and the Power E*Trade app. Both these apps are separated based on the needs of beginner and advanced traders. 

The advanced version of this app comes with full-service platform money management and gives access to breaking news and streaming Bloomberg TV to help traders stay up to date with the latest financial news. It offers zero commissions on all penny stocks. But the one downside is that EV trade charges $6.95 per trade on OTC stocks.

5. Trade station

This platform is known for its super-fast trade executions and institutional quality. Trade station was founded in 1982 and has provided the best consistent trading experience to its users. 

It comes with two mobile app options- TO Select and TSgo. Both these apps offer zero-commission trades on penny stocks and all other equities. Talking over their difference: TSG users require no minimum account balance to take trades, but there is a $10-per-trade charge.

The TO Select app requires an account balance of a minimum of $2,000, but users can take commission-free trade on the desktop platform. TS Select can be the best option for beginners interested in trading penny stocks. It offers paper trading to test trading strategies in real-time or historical data.

Also, it provides access to several training resources, including webinars, market insights, and community forums. 

6. Fidelity

Fidelity is one of the top brokers that offer commission-free trading on stocks (including penny stocks). Also, like other best penny stock trading platforms, it doesn’t require a minimum account balance for taking trades. All its users, even its penny stock investors, can access its research and analysis tools through Fidelity’s Active Trader Pro platform. Even more, entrepreneurs are making more money than penny stock trading by developing a trading app similar to Fidelity.

The mobile app of this platform has a clean and easy-to-use interface which makes it easy to buy and sell a large number of penny stocks for their users. Also, it delivers regular stock portfolio, market, and research content for its users. Talk over the other app features: it offers additional features such as stock quotes and intraday valuations, position tracking, etc.  

Fidelity does not charge a commission for stock trades, including penny stocks, and there is no account minimum. Regardless of trading frequency or account balance, all Fidelity customers provide access to its Active Trader Pro platform.

Talk over is one the best stock screener; it offers searches on OTC stock exchanges that can reduce the searches to fewer than 1,000 stocks.

You don’t like trading stocks but still want to make money from this market? Check the alternative ways to make money from penny stock in the next part.

User benefits: Why use apps to buy penny stocks?

With the current digitalization trend, using mobile apps for penny stock trading seems to be the best way to take trades and make money. Banks have also published their trading app to allow their account holders to take trades. Nowadays, traders have great options for choosing apps to trade penny stocks.

These are some advantages that users can take from trading apps:

• The app offers Commission-free trading
• Instant notifications and alerts on users’ devices
• Trading strategies suggested by the app’s algorithms
• The most app offers automated AI trading 
• The app ensures account security with advanced security features

How to make money from penny stocks without trading?

This question is worth asking for users who don’t know about trading and don’t have enough time for market research by performing technical analysis. 

No worries! Many alternate ways are available to make money without using apps to trade penny stocks:

1. You can use the app’s bots to perform automated trading
2. Many mutual funds are available that invest in penny stocks
3. Take annual dividends from your investments in stocks.
4. Subscribing for trading signals that notify you of any available trade opportunity
5. Publish your stock trading app.

App publishing in trading has also become a better investment option among entrepreneurs and investors. With your trading app, you can take a commission from each user whenever they trade, whether they win or lose. 

But how good is this business opportunity by publishing your app? You’ll understand this in the next section.   

Should businesses invest in the development of penny stock trading apps?

Businesses in the financial sector are presented with a promising opportunity – investing in the development of a penny stock trading app. This decision, laden with potential benefits, calls for thoughtful consideration of market dynamics and the associated challenges.

1. Capturing Rising Interest

Penny stocks, with their modest capital requirements and enticing upside potential, have sparked a surge in investor interest. The demand for platforms offering easy access to trade these stocks creates a favorable environment for businesses to invest in a specialized trading app.

2. Embracing Technological Advancements

In the age of technological progress, trading is shifting towards mobile platforms. A well-designed trading app can position businesses at the forefront by offering real-time quotes, advanced analysis tools, timely alerts, and seamless trade execution. This aligns with the preferences of modern investors seeking convenience and accessibility.

3. Targeting a Tech-Savvy Demographic

Investment and stock trading apps are not only reshaping the financial landscape but also capturing the attention of a younger demographic. Tech-savvy individuals, driven by the desire for instant access to trading, are drawn to platforms that empower them to make informed financial decisions at their fingertips.

4. Gaining a Competitive Edge Through Customization

A proprietary trading app provides businesses with a distinctive competitive advantage. Tailored to the unique needs of users, such an app can deliver a personalized and seamless user experience. This level of customization fosters customer loyalty and sets the business apart in a crowded market.

5. Navigating Challenges

However, the path to developing a penny stock trading app is not without hurdles. Striking a balance between innovation and compliance with financial regulations is crucial. Ensuring the security of user data and maintaining real-time performance pose additional challenges, requiring substantial investment and specialized expertise.

6. Strategic Decision-Making

Before venturing into the development of a penny stock trading app, businesses must conduct meticulous market research and feasibility studies. This strategic decision demands a comprehensive understanding of the target audience, market trends, and potential challenges. Consulting with industry experts can provide valuable insights and enhance the likelihood of success.

What should we conclude? 

After reading the blog, we can conclude that there are many ways to make money in the stock market, even without taking trades and putting your money at risk on penny stock apps. 

If you want to develop and publish your trading app, you can do more research, or even better, check out this blog for a development guide on stock trading apps.

Even better, you can call us to guide you on how you can start your business. Also, you can publish your app from our app development team to start and expand your stock trading app business.   

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Frequently Asked Questions

You can check some most commonly frequently asked questions within this section to help you resolve any doubts regarding the best penny stock trading apps.

Q. Are stock trading apps reliable or not?

Ans: Yes, trading apps are reliable because of their security. You can also include security features in your app for users’ fund security and trust.

Q. How can I make money from my trading app?

Ans: You can make money by charging trading fees to every user in each trade. Also, you can set a small withdrawal fee or provide paid trade strategies for your customers on your app.

Q. What features can I include in my trading app?

Ans: You can offer many valuable features, such as

• Bot trading
• Trading Indicators
• Latest financial news
• User’s customized trading alters