How To Buy Penny Stocks On Etrade
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how to buy penny stocks on etrade
Because of the threat to the Public Interest in buying and trading securities with Caveat Emptor designation, E*TRADE will not allow any opening transactions in these stocks. E*TRADE also prohibits deposits and transfers in of Caveat Emptor securities. If you hold a stock which becomes classified Caveat Emptor, you may continue to hold that security or you may sell to close the security assuming a market is available.
A good way to start thinking about potential stocks is to consider the companies and brands you use every day. There are a number of resources and tools available at E*TRADE that may help guide your decisions about investing in companies that you are interested in.
Other than CME Equity Index contracts, which trade 24/6, all other futures markets are available through the E*TRADE platform nearly 24 hours a day, six days a week (Sunday 5 p.m. CT to Friday 4 p.m. CT). For more information on futures contract trade specifications, including, tick size, tick value, margin requirements, and trading hours, visit etrade.com/futures.
E*TRADE charges $0 commission for online US-listed stock, ETF, mutual fund, and options trades. Exclusions may apply and E*TRADE reserves the right to charge variable commission rates. The standard options contract fee is $0.65 per contract (or $0.50 per contract for customers who execute at least 30 stock, ETF, and options trades per quarter). The retail online $0 commission does not apply to Over-the-Counter (OTC) securities transactions, foreign stock transactions, large block transactions requiring special handling, futues, or fixed income investments. Service charges apply for trades placed through a broker ($25). Stock plan account transactions are subject to a separate commission schedule. All fees and expenses as described in a fund's prospectus still apply. Additional regulatory and exchange fees may apply. For more information about pricing, visit etrade.com/pricing.
A penny stock is an inexpensive stock, usually one valued at less than $5. Many penny stocks are over-the-counter stocks, meaning they're sold through networks of brokers outside of major exchanges like the Nasdaq and the New York Stock Exchange. You can usually buy penny stocks through E-Trade and other brokerages the same way as you can buy other stocks, by searching for the company name or ticker symbol. Do research before buying any stock and watch for penny stock scams.
A penny stock is a term for an inexpensive stock. Penny stocks don't literally have to sell for pennies, and the term is typically used in the United States to mean stocks that sell for less than $5 per share. Like other stocks, they represent a partial ownership stake in a company. They also usually enable their owners to vote on company directors and shareholder resolutions, collect any dividends and ultimately reap the benefits of increases in stock price should they sell their shares.
Many penny stocks are also what are called over-the-counter stocks, meaning they're not traded through major exchanges like the New York Stock Exchange or Nasdaq. OTC trading happens through networks of brokers, and investors should be aware that it can take longer to buy and sell OTC stocks. OTC prices can fluctuate quickly, meaning you may have trouble buying and selling the stocks for the prices you want.
Many brokerages, including E-Trade, let you buy and sell OTC stocks and penny stocks similarly to other stocks traded on exchanges. Search for the company name or ticker symbol and put in a buy or sell order. Make sure you've done your due diligence and understand the risks of investing and any trading commissions you'll pay when you buy and sell the stock. Then, use E-Trade for the penny stocks you want to buy or sell or another brokerage of your choice.
The reason many investors are attracted to penny stocks is their potential for a large gain. That is, if you buy a stock for under $5 in a company that turns out to do well, you can stand to make a lot of money when the stock leaves penny territory. The relatively small market capitalization, or total stock value, and low number of outstanding shares also lend to the rapid price fluctuations, which mean you can possibly make a lot of money in a short amount of time from penny stocks.
It's important to remember, though, that many penny stocks are cheap for a reason. They might be struggling startups or older companies that have lost their luster. As with other stocks, you can potentially lose all your money if the value of a stock falls to zero or lose substantial amounts if the price drops and doesn't recover before you sell.
Also keep in mind that some penny stocks become the subject of what are called pump-and-dump scams. The term refers to situations where fraudsters buy cheap stocks, tout the companies online or through other media without mentioning they own the stock and then sell the stock when the value rises. If you follow their recommendations, you can be left holding the stock when the price drops again, costing you money. Remember to only follow stock market advice from sources you trust and to double-check any reports you see from lesser known sources.
The Securities and Exchange Commission today announced an enforcement action against current and former brokerage subsidiaries of E*TRADE Financial Corporation that failed in their gatekeeper roles and improperly engaged in unregistered sales of microcap stocks on behalf of their customers.
An SEC investigation found that E*TRADE Securities and E*TRADE Capital Markets sold billions of penny stock shares for customers during a four-year period while ignoring red flags that the offerings were being conducted without an applicable exemption from the registration provisions of the federal securities laws. E*TRADE Securities remains an E*TRADE subsidiary while E*TRADE Capital Markets was sold earlier this year and is now called G1 Execution Services. 041b061a72