If you have a some money lying around and are OK with a risker investment (with the potential for big returns),  then you need to know that there are several options for you. There are many small cap and micro cap companies aka “penny stocks” that are sold on unregulated Over The Counter (OTC) or on the regulated the OTC Bulletin Board (OTCBB) exchanges. These OTC stocks have less liquidity and don’t have the market caps yet to qualify for trading on the bigger exchanges such as the NYSE or NASDAQ. The OTCBB is a more regulated service in which the listed stocks are traded in real time.

For potential investors who often ask me “How do I invest in penny stocks?”, well technically speaking investing in micro cap stocks is an easy process. Open an account at an online brokerage firm that has a good reputation and is linked to an OTC penny stock market. Fund your account, and finally, trade. You can find several legitimate brokers or brokerage firms online and evaluate their trading platform, commission costs, and ancillary features. Make sure to deal with a registered broker or dealer that will have you sign an agreement and will provide you with commission disclosure and statement of inherent risks. In general, keep in mind that when you trade sub-$1 stocks, you will pay higher commission fees or broker assistance fees. Some examples of online brokers that enable you to trade penny stocks are Noble Trading and Zecko Trading.

Look for online trading tools such as interactive price charts, interactive stock screeners as well as real-time quotes. Learn how to use these trading tools because it’s important to analyze the stocks’ price movement.  Also come  familiar also with the pink sheet market and how it works.  Before engaging in real trading activity, it’s recommended that you pick several small cap and micro cap stocks and paper-trade them before you invest in the real thing. That way, you can take your time to learn the stock rhythm and the trading pattern.

If you do some money to invest, consider limiting the amount you invest especially in the beginning. If you’re still confused about how penny stock market works  do more research or consider using a reputable full service penny stock broker that can explain things to you and walk you through the process. It’s also good to develop your trading skills by signing up for reputable small cap and micro cap stock newsletters and joining online forums but be sure to not be lured by the stock picks fed to you in forums.

Want To Know What Small & Micro Cap Stocks I’m Recommending Right Now?

If you are interesting in learning about a few hot penny stock opportunities I feel could be the next big thing then I’d encourage you to subscribe to my newsletter called: Paul’s Penny Stock Insiders… as a thank you ‘ll give you a report entitled “The Only 3 Penny Stocks We Are Recommending Right Now (and Why)“.