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Robinhood is one of the few brokerage accounts that offers access to penny stocks. Here’s how to find and purchase exchange-listed penny stocks on this popular trading platform.
You can buy penny stocks on Robinhood, but the selection is limited. This is because most penny stocks are not listed on the major exchanges like Nasdaq or the New York Stock Exchange and are, instead, listed on the Over-the-Counter Markets. Robinhood users can only trade exchange-listed stocks, making the app’s selection limited to penny stocks listed on the major exchanges.
Additionally, it’s difficult to search for penny stocks. Users can search for broad categories, like ETFs or stocks across certain sectors, but penny stocks are not a searchable category on the app.
Exchange-listed penny stocks are typically viewed as the safer alternative to OTC stocks because to be listed on an exchange, stocks must meet that exchange’s listing requirements and pay entry and annual listing fees. Requirements vary by exchange but typically include minimum stockholder equity amounts, minimum share prices and minimum shareholder counts.
Robinhood doesn’t offer access to over-the-counter (OTC) penny stocks.
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
| Available asset types | Stocks, Options, ETFs |
|---|---|
| Stock trade fee | $0 |
| Option trade fee | $0 |
| Annual fee | 0% |
To browse penny stocks, log in to Robinhood on a computer using the web browser. You can’t browse penny stocks in the app or on mobile.Once you’re logged in on your desktop:
Taking these steps limits the available stocks you see to Robinhood’s penny stock offerings. From here, you can sort the available stocks using Robinhood’s stock filters along the top of the screen. Organize by price, movement, market cap, popularity and analyst ratings.
Watch our short video that takes you step-by-step through the process:
Ready to submit an order? Here’s how:
Robinhood doesn’t offer access to over-the-counter shares, which helps mitigate some of the risks associated with penny stocks. Still, you should carefully consider the following before investing in penny stocks:
Yes, it’s possible to day trade penny stocks on Robinhood. But Robinhood Instant and Gold account holders can only execute up to three day trades in a five trading day period.A day trade is any security that is bought and sold on the same trading day. But day trading is a highly risky trading method. To execute a profitable day trade, you must be able to competently wield numerous trading strategies alongside a robust understanding of the market you plan to trade in.
Even with all the right tools at their disposal, day traders often face sizable losses. And Robinhood isn’t well-equipped to cater to this style of trading. It lacks the advanced charting and analysis tools of several of its competitors, including Webull and Tastyworks. Without advanced charting tools and indicators, day trading penny stocks on Robinhood could lead to uninformed trades that result in crippling losses.
The Pattern Day Trading rule is set by FINRA and governed by the Securities and Exchange Commission (SEC), and applies to all US brokerages. It limits day trades to three day trades within a five trading day period for anyone with less than $25,000 in their account. For Robinhood traders, this rule applies to Instant and Gold account holders with less than $25,000 of equity in their account at the end of the previous trading day. Robinhood states that this restriction helps protect its investors from taking on too much risk — especially new investors with limited equity.
If you place more than three day trades within a five-day trading period, Robinhood marks you as a Pattern Day Trader (PDT) and you can’t place any day trades for 90 days unless you bring your account equity above $25,000. This rule may frustrate some traders, but is there to protect traders from the substantial risks involved in day trading.
Keep track of how many day trades you’ve made in five days by scrolling down to the Day Trades section from the Investing page of your account.
If you’d like to day trade on Robinhood, there are a couple ways around the platform’s pattern day trading rule:
Yes, you can day trade by downgrading your Robinhood Instant or Gold account to a Cash account. That’s because Robinhood doesn’t impose the same pattern day trading restrictions on Cash account holders.
Those new to Robinhood automatically start with a Robinhood Instant account — a margin account with instant deposit support and extended-hours trading. The primary difference between Cash and Instant accounts is that Cash accounts don’t support instant deposit or settlements.
You can downgrade to a Cash account at any time. If you hold a Robinhood Gold account, downgrade to a Robinhood Instant account by taking the following steps:
To downgrade from an Instant account to a Cash account, email the Robinhood customer support team and request the change.
Read our full review of Robinhood
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While it’s possible to buy and sell penny stocks on Robinhood, the platform only offers access to exchange-traded stocks. And the platform’s pattern day trading rule may limit the number of trades you can execute.
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