How to Find Stocks Under a Dollar
Stocks that cost under a dollar can be very attractive as speculative investments albeit they are very risky. If anything good happens to the company, however, the stock can double, triple or completely go through the roof very quickly. Some investors like to set aside some "play money" in their portfolios to buy such stocks. Under a dollar stocks are generally called penny stocks, although a lot of people don't know that any stock that costs under five dollars is considered a penny stock. If you are interested in buying some stocks that cost under a dollar, here is how you can find them.
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Instructions
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Use a stock screener to find all under a dollar stocks traded on major stock exchanges. This is very easy and quick to do. If you have never used a stock screener, try Google Finance - check resource section for an article on how to use it. In the screener, search for stocks by Last Price - enter $1 as maximum price and $0 (or a bit more) as minimum price. As shown in the image, this search has returned a list of 458 stocks that trade under a dollar as of this writing.
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Beware that major stock exchanges have listing requirements which require the stock price to be maintained at least above a dollar. If their share prices drop under a dollar, the companies have a limited amount of time, usually a few months, to comply - to raise their share prices. This can be done in a few ways - a reverse stock split, shares buy back, or the best scenario, good company news. It's up to you, however, to research the stock and decide whether it has potential and is therefore worth buying.
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Visit www.otcbb.com to find thousands of under a dollar stocks. OTC BB (Over the Counter Bulletin Board) is an exchange that lists lots of penny stocks. Some of them cost just a few pennies, while others trade for fractions of a penny. Click on OTC Symbol Directory button (shown in the picture) to find stock listings. If you want to systematically look for stocks, search for symbols starting with an A, then a B, etc. Or you can just download all the listings and examine them at your leisure.
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Visit www.pinksheets.com - another over the counter exchange that lists lots of penny stocks. Click on OTC Company Search tab (shown in the picture) to find stock listings. Again there is no easy way to classify them, but you can download them to your own computer.
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Do a lot of research before you buy penny stocks. You may have gathered by now that there is no easy to way to find good penny stocks on OTC exchanges unless you sift through tons of listings. That's why you will see all kinds of advertisements for hot penny stock lists, penny stock research sites, etc. Some of them might be legitimate, but beware of all kinds of pump and dump schemes on those sites and message boards.
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Resources
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