How do you find penny stocks?


Quick Answer

To find a penny stock, a consumer must visit one of the eligible penny stock brokerages, such as the OTC Bulletin Board or OTC Link LLC. Search for the desired stock, and abide by the government regulations that pertain to this type of stock.

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Full Answer

  1. Visit a relevant penny stock brokerage

    The two common penny stock brokerages are OTC Bulletin Board and OTC Link LLC. These exchanges are quoted over-the-counter. In addition, they contain securities that are usually less than $5 per share. Penny stocks can also be found on securities exchanges, including foreign securities exchanges.

  2. Enter appropriate search criteria

    After visiting one of the relevant over-the-counter brokerages, a person should enter the appropriate ticker symbol of the desired penny stock. A person can also browse within the brokerage database to filter penny stocks by type, prices and even trading volume. The over-the-counter brokerages contain trading information that is updated daily, providing the user with real-time data related to penny stock quotes.

  3. Abide by the rules of Securities Act of 1934

    Since penny stocks are considered speculative instruments, there are certain regulations that pertain to these types of securities. Under the Securities Act of 1934, a broker-dealer approves the customer and receives from the customer a written agreement if a transaction is initiated. In addition, a customer must review a disclosure document provided by the brokerage related to the risks of the penny stock.

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