How to Buy Direct Penny Stocks

While some companies sell penny stocks (stocks trading under $5.00 per share) directly to the public without the need for a broker, the vast majority of penny stocks are sold through traditional stocks brokers. Keep in mind that while it may be possible to buy certain penny stocks directly from the company you're interested in, you will need a broker when it comes time to sell your shares.

Instructions

1. Contact the Investor Relations department of the company whose penny stock you are interested in and ask if they make sales directly to the public without the need for a broker.

2. Ask about any fees, if the company does make direct sales to the public. Sometimes the fees associated with a direct purchase can be greater than the fee you would pay to a discount stock broker.

3. Exercise caution when purchasing penny stock directly from a company as there is a great deal of risk--and, very often, fraud--involved with penny stocks.

Tips & Warnings

• Be especially careful when receiving hot "tips" regarding penny stocks. Many times the "tipster" is paid a handsome fee for touting a penny stock which may cause its price to rise temporarily, allowing the scammers to make a quick profit before the price drops back down.

References

• Rules for buying penny stocks

Resources

• Buying and Selling Penny Stocks