Canadian penny stocks open a lot of door of opportunities to get in on potentially successful and promising small and young Canadian companies before they even get recognized or acknowledged for their great abilities to build great shareholder value. Defined as a share that can trade for as low as $5 and even lower, Canadian penny stocks can be bought through the TSX Venture Exchange and the Toronto Stock Exchange, with participants specializing in technology and commodities. For the last decade, Canada has been recognized for its abundant natural resources and high quality graduates as products of excellent Canadian universities.
Canadian penny stocks may be purchased through a stockbroker who is authorized to buy Canadian stocks. Canadian dollar is the currency used in Canadian stocks trading. As with any hot penny stocks, you would want to choose a company that shows financial stability in the future through developing highly-competitive products and increasing their sales and profits.
If you are a non-Canadian investor, perhaps an US investor, you have basically 3 choices of trading in Canadian penny stocks. First, you can choose to purchase pink sheets. Second, you can choose to open up an account with a Canadian stockbroker. Third, you can choose to open up an account with an US stockbroker with an entry to the Canadian securities and exchange.
When you choose the first option, you need to be very vigilant and careful by doing your research since pink sheets are considered as an unregulated secondary market. Gather more information from people with experience trading in Canadian penny stocks or from Canadian penny stocks magazines and newsletter using this option. If you wish to go for the other options, be aware that the companies are usually listed on the TSX Venture Exchange because they first have to meet all the requirements of the Toronto Stock Exchange before they can finally enter TSE. In addition to that, going for the second option can give you the benefit of extra research services from stockbrokers. The advantage of going for the first and third option is that you can save a lot from the currency exchange cost when trading in Canadian penny stocks.
Here are the steps you need to know when buying Canadian penny stocks:
Talk to your investor about your interest in purchasing Canadian penny stocks. Your investor will then contact a stockbroker and these Canadian penny stocks will be bought either through TSX Venture Exchange or Toronto Stock Exchange.
Ask your investor as well as your stockbroker about what penny stocks have steady or going up performance. This is a very important part as it already signals that you are ready to invest. Just remember not to invest in a company with unstable records
Decide on how much you are willing to invest on these penny stocks.
Make it a habit to visit the website of Toronto Stock Exchange or TSX Venture Exchange daily so that you can monitor how your Canadian penny stocks are performing in the Canadian economy. This way, you can decide whether to wait or let the stocks go by selling them.