As the adage goes, “look after the pennies and the pounds look after themselves”. Although you might not save your way to financial freedom by penny pinching, there is a possibility of making serious money by trading penny stocks.
However, these investments can be much more riskier and volatile compared to other shares because the companies are usually small, unestablished and fighting to make their name in the market. And yet, who doesn’t like an underdog?
| Penny stock | Icon | 1-year performance (to Oct. '26) | 5-year performance (to Oct. '26) | Details |
|---|---|---|---|---|
| Strive (ASST) |  |
-89.38% | -57.06% (3 years – 2023 IPO) | Ways to invest |
| Cardiff Oncology (CRDF) |  |
-68.20% | -77.49% | Ways to invest |
| Polar Capital Holdings plc (POLR) |  |
91.22% | 3.74% | Ways to invest |
| Me Group International PLC (MEGP) |  |
-48.68% | 46.30% | Ways to invest |
| Stelrad Group PLC (SRAD) |  |
-11.43% | 24.00% (3 years) | Ways to invest |
| Permianville Royalty Trust (PVL) |  |
-3.37% | -4.97% | Ways to invest |
| Porch Group (PRCH) |  |
13.08% | -19.68% | Ways to invest |
Here’s how to invest in penny stocks:
Quite a few of the UK’s share dealing platforms offer penny stocks. If there are particular penny stocks you’re interested in, make sure that your chosen platform offers them before signing up.
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“Penny stocks” is a loose term to mean cheap, low-priced shares of small, often newly-listed companies.
These aren’t hard and fast rules but typical characteristics of a penny stock include:
You could consider investing in penny stocks if you’re looking for a cheap investment, and:
"Penny stocks are very different from ordinary shares and need to be treated with a healthy dose of educated caution. Follow these tips to maximise your chances of success.
This is important for all investments, but particularly higher-risk investments such as penny stocks. Blue-chip stocks are, by their nature, lower-risk options as they have a long history of strong financial performance.
Before you start buying, decide which penny stocks you’re going to invest in and how much you’re going to invest. Also, decide what price you’d sell and cut your losses if the shares were to fall. Stick to your investment strategy guns if this does happen. The same applies to gains.
It can be easy to get emotionally attached to a penny stock, as they’re often the underdogs in your stock portfolio. So when their share price falls and falls some more, you can find yourself making excuses as to why you should keep holding. This is why it’s important to create a strategy, so you leave the emotions out of it.
Penny stocks may appear cheap compared to other shares listed on the LSE but don’t base your investment decision purely on this. The share price itself doesn’t really tell you whether the stock is “cheap” or not because that’s more to do with the valuation."
Here are some of the benefits and risks of investing in small-cap UK penny stocks:
To make comparing even easier we came up with the Finder Score. Costs, features, ease and range of investments across 30+ platforms are all weighted and scaled to produce a score out of 10. The higher the score the better the platform – simple.
Read the full methodologyAll investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Penny stocks, with their low cost and high potential returns, can add a dash of excitement to your investment portfolio. They carry significant risk, though. The possibility of losing your entire investment isn’t just theoretical, it’s a very real risk. It’s essential that penny stocks don’t make up the majority of your portfolio. Diversification is key, and it’s crucial to only invest money you’re fully prepared to lose.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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