robinhood penny stocks
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Robinhood Can Provide Good Training Wheels for Penny Stock Beginners

Ruchi Gupta - Author

Jul. 28 2020, Updated 7:27 p.m. ET

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.

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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 are notoriously scant on financial information to help investors make informed trade decisions. That is particularly true of  penny stocks that trade on OTC markets, where regulations and disclosure requirements are typically less stringent than major exchanges. Therefore, Robinhood penny stocks may have more information than OTC market’s penny stocks because of disclosure requirements to maintain a listing on NYSE and NASDAQ.

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. 

How to find Robinhood penny stocks to buy:

The Robinhood search tool can help you find penny stocks to buy on the platform. Notably, Robinhood search capability is only available on the website but not the mobile apps.

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robinhood search by price
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From your Robinhood account on desktop, find the “Popular Collections” tab and select “Show More.” There you will see different stock sectors. Choose the sector you want to see all the stocks available. To generate a list of available Robinhood penny stocks, search for costs below $5 apiece. From there, you can pick the stock that suits your taste, enter the number of shares you want to purchase, and submit it.

Finally, as you have now understood Robinhood penny stocks and how you can maximize your stock returns while minimizing risks, you may want to familiarize yourself with Robinhood stocks taxes.


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