Verify market access and instrument type
The first question is whether the broker offers direct share dealing at all, and if so, on which exchanges. Penny stocks trade in different venues depending on the country, including smaller exchange listings and over-the-counter markets, and many brokers restrict or exclude these segments. It is also essential to distinguish between owning actual shares and trading derivatives such as CFDs that reference share prices, because ownership rights, leverage and risk differ substantially. Check the broker's current product list and confirm the exact instrument type in writing before trading.
- Confirm whether direct share dealing is offered and which exchanges or market segments are covered.
- Distinguish share ownership from share-linked derivatives such as CFDs, which carry leverage risk.
- Ask whether low-priced or over-the-counter securities are restricted or excluded.
- Check whether access varies by the entity or region under which you would open an account.

