If you are looking into getting started with penny stock trading, then answering this question is a must. How Much Money To Start Trading Penny Stocks? Well, first things first. Lets start by asking you some questions. You should ask yourself some of the following. What are you trying to accomplish by trading Penny Stocks? Are you trying to become a part time trader, do you want to make a complete living from trading pennies, how fast are you looking to make money, how much money are you trying to make in a particular time frame and more. These are some valid questions that you should ask yourself. Depending on how you answer those questions, will help determine the answer to the “How Much Money Do You Need To Get Started Trading Penny Stocks” question.
Below, you will find an insert and answer to this question from our Ultimate Guide for “how to invest in penny stocks for beginners“.
How Much Money To Start Trading Penny Stocks?
If you have read some of the other articles and information out there on Penny Stocks, then I’m sure that you have seen things like.. “oh you need at least $1,000 to $5,000 to get started trading penny stocks”, or “You can get started trading penny stocks with $300”. Well, I’m here to tell you that you can get started with $100 if you wanted to. Heck, even $50. How is this possible do you ask? Take a walk with me here and let me explain. Currently, most brokers charge anywhere between $2 to $10 per trade to buy or sell a stock.
TIP* Example: Let’s use Charles Schwab for our example. Charles Schwab currently charges $4.95 per trade. Alright, so let’s say you have $100 to your name and you want to buy a penny stock. With a $100 of trading cash, I would suggest that you buy a stock that costs $.0001/per share (this is a sub penny stock). If you went through Charles Schwab and wanted to spend your $100 on this stock, you could purchase 950,500 shares. What this means is that after your trade commission of $4.95, you are left with $95.05 to spend on the shares. And $95.05 = 950,500 shares at .0001 per share. Now, let’s say that by some miracle, your stock ends up running from $.0001/per share to $.0005/per share and you sell at $.0005, you just sold your 950,500 shares for $475.25 (minus $4.95 in new commission trade fee). So after the two commission fees (one to buy the stock, one to sell), you ended up with $470.30. Not bad right? Alright, that was the extent of my math skills for you.
As you can see, you don’t need a ton of capital to start trading Penny Stocks. But then again, the more cash that you have to trade, the quicker you could make bigger gains (or bigger loses).
If you like what you see here and would like answers to more questions such as this one “How Much Money To Start Trading Penny Stocks “with actual examples, tips and other valuable information, please visit the extreme guide on “how to invest in penny stocks for beginners” here: Ultimate Penny Stock Trading Guide.