Buying Penny Stocks on Fidelity TL;DR
- Create a Fidelity Account
- Fund Your Account
- Research Penny Stocks
- Log In to Your Fidelity Account
- Enable Penny Stock Trading
- Place an Order
- Search for the Stock
- Select Order Type
- Enter Order Details
- Review and Confirm
- Place the Order
What are Penny Stocks?
Penny stocks are low-priced, high-risk securities that can be enticing for investors seeking potential high returns.
Fidelity, a reputable online brokerage platform, provides a user-friendly interface for trading these stocks.
In this guide, we’ll walk you through the process of buying penny stocks on Fidelity
Step 1: Create a Fidelity Account
If you don’t already have a Fidelity account, the first step is to sign up. Visit the Fidelity website and click on the “Open an Account” button. Follow the on-screen instructions to create your account. You will need to provide personal information, financial details, and agree to Fidelity’s terms and conditions.
Step 2: Fund Your Account
Before you can start buying penny stocks, you need to fund your Fidelity account. Link your bank account, and transfer funds to your Fidelity account. You can do this via electronic transfer, check deposit, or wire transfer.
Step 3: Research Penny Stocks
Thorough research is crucial when investing in penny stocks. Fidelity provides a wealth of research tools and resources to help you make informed decisions. Use their stock screeners, research reports, and analysis tools to identify potential penny stock investments.
Tip: Use TradingView to Find the Best Entry Points for Penny Stock
TradingView is my favorite tool for doing technical analysis using the RSI (relative strength index) to find the best entry points for penny stocks.
Step 4: Log In to Your Fidelity Account
Once your account is funded and you’ve done your research, log in to your Fidelity account using your username and password.
Step 5: Enable Penny Stock Trading
Fidelity might require you to enable penny stock trading on your account. To do this, contact Fidelity’s customer support or access your account settings online.
Step 6: Place an Order
Now that your account is set up and funded, it’s time to place an order for the penny stock you want to buy. Follow these steps:
a. Search for the Stock: Use the search bar or research tools to find the penny stock you want to buy.
b. Select Order Type: Choose between market orders (buys at the current market price) or limit orders (sets a specific price at which you want to buy).
c. Enter Order Details: Provide the number of shares you want to purchase and any additional instructions.
d. Review and Confirm: Carefully review your order, including the total cost and any fees.
e. Place the Order: Click the “Place Order” button to confirm your purchase.
Step 7: Monitor Your Investments
After placing your order, it’s essential to monitor your investments regularly. Penny stocks can be highly volatile, and it’s crucial to stay informed about market developments that may affect your holdings.
Step 8: Diversify Your Portfolio
While penny stocks can offer significant opportunities, they also come with substantial risks. It’s wise to diversify your investment portfolio to mitigate these risks. Fidelity offers a wide range of investment options to help you build a diversified portfolio.