According to the Securities and Exchange Commission’s (SEC) definition, penny stocks are defined as stocks that trade at $5 per share or less. They may seem cheap, sketchy, and unstable (many of them are), but they’re also great for building small trading accounts quickly.
When trading penny stocks, you can’t depend on the same market dynamics as bigger stocks. They’re entirely different animals, so you may need new trading strategies.
If you’re new to trading penny stocks or even trading in general, Robinhood is a good enough place to start — it charges zero fees and doesn’t require a minimum deposit. However, you might want to move to another broker down the line. Robinhood doesn’t give advanced traders everything they should be looking for in a broker.
Read on to learn more about trading penny stocks on Robinhood, and check out my list of penny stocks to watch on the platform!
Table of Contents
- 1 Trading on Robinhood
- 2 Can You Buy Stocks Under $1 on Robinhood?
- 3 Penny Stocks on Robinhood Under 10 Cents
- 4 Robinhood Penny Stocks Market
- 5 How to Find Penny Stocks on Robinhood
- 6 What Is a Good Penny Stock to Buy on Robinhood?
- 7 8 Robinhood Penny Stocks to Watch on Robinhood March 2023
- 7.1 1. Ambrx Biopharma Inc. (NYSE: AMAM) — The Biotech Penny Stock Spiker
- 7.2 2. Intelligent Living Application Group Inc. (NASDAQ: ILAG) — The Blockchain News Penny Stock
- 7.3 3. Riot Platforms Inc. (NASDAQ: RIOT) — The Bitcoin Breakout Penny Stock
- 7.4 4. Marathon Digital Holdings Inc. (NASDAQ: MARA) — The Other Bitcoin Penny Stock
- 7.5 5. Ocean Biomedical Inc. (NASDAQ: OCEA) — The Recent SPAC Penny Stock
- 7.6 6. Expion360 Inc. (NASDAQ: XPON) — The EV Battery Penny Stock
- 7.7 7. Intuitive Machines (NASDAQ: LUNR) — Not a Penny Stock, Not the #NextHKD
- 7.8 8. Terran Orbital Corp. (NYSE: LLAP) — The Penny Stock Sympathy Play
- 8 What to Consider When Trading Penny Stocks
- 9 How to Buy Penny Stocks on Robinhood
- 10 Trading Fees on Robinhood
- 11 Quick Tips to Making Money With Penny Stocks
- 12 What Is the Minimum Needed to Buy Penny Stocks?
- 13 Key Takeaways
Trading on Robinhood
Robinhood is an easy-to-use, no-commission trading platform accessible to just about anyone. It also offers zero minimum deposits … You can even buy partial stock with its fractional shares feature.
Robinhood gives you access to over 5,000 U.S. listed stocks and ETFs, as well as ADRs in foreign listed companies. As of this year, Robinhood now allows trading in select OTC stocks as well.
Can You Buy Stocks Under $1 on Robinhood?
Yes, you can definitely buy stocks under $1 on Robinhood. Listed penny stocks will often fall beneath the $1 minimum listing threshold.
The OTC stocks that Robinhood allows access to are often on the pricier side.
Buying penny stocks is as easy as buying any other stock on the app, too. Just choose your stock, pick your order type, input how many shares you’re buying, and submit your order.
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Penny Stocks on Robinhood Under 10 Cents
Looking to trade the cheapest stocks on Robinhood? Penny stocks under 10 cents will occasionally pop up, but not too often.
If you’re looking to trade stocks under 10 cents, the OTC markets have the biggest selection. Unfortunately, Robinhood doesn’t allow trading of the sketchiest OTC stocks.
Learn how I choose which stocks to trade in this guide. Use this stock scanner to further improve your trading game.
Robinhood Penny Stocks Market
Many stock traders use Robinhood to buy penny stocks because it doesn’t charge fees. This has led to runs on certain penny stocks, because of Robinhood’s limited selection.
How to Find Penny Stocks on Robinhood
Robinhood has curated stock lists under its “Trending Lists” section, but, unfortunately, it doesn’t feature a list of penny stocks. You might need to play around with some filters on Robinhood to see these cheap stocks.
Here’s how you access penny stock lists on Robinhood:
- Log into your Robinhood account.
- Select the magnifying glass, and click on the “Trending Lists” menu.
- Select the business sector of your choice and sort in ascending order to see the cheapest stocks listed. Alternatively, you can push the filter button and set a maximum share price of $5, so you only see penny stocks.
You can rinse and repeat these steps to find the best penny stocks on any curated list Robinhood creates. If you’re confused because you find duplicate stocks across the lists, you can just write down which companies offer penny stocks and create a custom penny stock list.
What Is a Good Penny Stock to Buy on Robinhood?
A few of the stocks I’ve been watching lately are accessible to Robinhood traders. Just remember …
This is only a watchlist. I have no plans to trade these stocks — and I won’t unless they fit into one of my preferred setups.
I want you to focus on my process, not my stock picks. If you want to become a self-sufficient trader, you’ll need to create your own watchlists.
Get a new no-cost watchlist sent to you each week by signing up here.
8 Robinhood Penny Stocks to Watch on Robinhood March 2023
My top 8 Robinhood penny stocks to watch in March 2023 are:
- (NYSE: AMAM) — Ambrx Biopharma Inc. — The Biotech Penny Stock Spiker
- (NASDAQ: ILAG) — Intelligent Living Application Group Inc. — The Blockchain News Penny Stock
- (NASDAQ: RIOT) — Riot Platforms Inc. — The Bitcoin Breakout Penny Stock
- (NASDAQ: MARA) — Marathon Digital Holdings Inc. — The Other Bitcoin Penny Stock
- (NASDAQ: OCEA) — Ocean Biomedical Inc. — The Recent SPAC Penny Stock
- (NASDAQ: XPON) — Expion360 Inc. — The EV Battery Penny Stock
- (NASDAQ: LUNR) — Intuitive Machines — Not a Penny Stock, Not the #NextHKD
- (NYSE: LLAP) — Terran Orbital Corp. — The Penny Stock Sympathy Play
Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.
The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.
1. Ambrx Biopharma Inc. (NYSE: AMAM) — The Biotech Penny Stock Spiker
My first Robinhood penny stock pick is Ambrx Biopharma Inc. (NYSE: AMAM).
First up on my list is the biggest biotech spiker in recent weeks. I’m talking +300% in five days!
Why I Like It
I love panic dip buys. And this thing is massively over-extended.
Which means there’s a good chance it panics and fits my pattern.
Technically, there’s a chance it moves higher … there’s always a chance. It’s a crap penny stock with a low float. They’re known to shoot up to crazy heights before crashing back down.
AMAM has a decently low float of only 38 million shares. Bullish cancer news started the spike.
That all works in its favor.
But again … these spikes are unsustainable and eventually the price will come crashing down. That’s when I start to get excited …
There are profit opportunities on the back end similar to the initial spike. You just have to know what to look for.
Whether the price moves higher, or falls back down, I’ll be watching.
2. Intelligent Living Application Group Inc. (NASDAQ: ILAG) — The Blockchain News Penny Stock
My second Robinhood penny stock pick is Intelligent Living Application Group Inc. (NASDAQ: ILAG).
A low float runner that’s consolidating sideways after an early January spike …
Why I Like It
First of all, it has a great history of running. That’s why good traders spend so long studying charts… former runners can run again.
https://t.co/gIIuF22exF Former runners can run again, never forget!
Back in October 2022 it spiked 330%.
The float is only 8 million shares. That’s a good sign. The share supply is low, and a low float will spike prices higher when demand increases. (Below 10 million shares is considered a low float.)
This ticker also spiked the first trading day of 2023. And it’s been consolidating since then.
Keep an eye out for a press release to push the price to new highs.
And if a press release doesn’t show up, we can always watch for panic dip buy opportunities.
3. Riot Platforms Inc. (NASDAQ: RIOT) — The Bitcoin Breakout Penny Stock
My third Robinhood penny stock pick is Riot Platforms Inc. (NASDAQ: RIOT).
RIOT is a crypto play. And crypto plays have been doing well lately.
Why I Like It
RIOT is focused on the blockchain technology aspect of crypto. Blockchain actually has real life application and value.
I’m not saying this stock is going to the moon. It’s not a buy and hold. But it’s in a better position to spike than most crypto stocks.
It rocketed up 680% toward the end of 2020 and the beginning of 2021. That was back when crypto was still trading at fairly high levels.
After a down 2022, 2023 has been fairly bullish. Bitcoin spiked almost 50% in the past two months.
A bullish crypto market contributes to the spikeability of this stock.
4. Marathon Digital Holdings Inc. (NASDAQ: MARA) — The Other Bitcoin Penny Stock
My fourth Robinhood penny stock pick is Marathon Digital Holdings Inc. (NASDAQ: MARA).
MARA is the other crypto stock on my watchlist …
Why I Like It
It’s a big former spiker.
It’s trading way off of its highs.
MARA has a similar chart to RIOT. Since crypto’s been bullish in 2023 thus far, I’m keeping a close eye on crypto stocks that have a good history of running.
5. Ocean Biomedical Inc. (NASDAQ: OCEA) — The Recent SPAC Penny Stock
My fifth Robinhood penny stock pick is Ocean Biomedical Inc. (NASDAQ: OCEA).
OCEA is a recently merged SPAC that’s in play. SPACs are similar to IPOs. Basically they’re whole purpose is to merge with a private company to help it go public.
Why I Like It
SPACs are notoriously volatile.
When a SPAC merges and brings a company public, there’s a lot of attention on the stock price and how the market reacts.
All that attention creates a lot of volatility. Volatility we can use to profit if the chart follows popular patterns.
I’ve traded it twice already. My best trade was a $390 short sale (starting stakes $3,380).
I probably only got the shares to short because I use TradeZero. I think this is the best broker for shorting, especially hard-to-borrow stocks like OCEA…
Give TradeZero a try and I’ll give you a free gift!
I’m green on this ticker. And that’s how I want to stay. Only take the best setups!
It spiked 700% in late February. We’ll see if it can make any more volatile moves …
6. Expion360 Inc. (NASDAQ: XPON) — The EV Battery Penny Stock
My sixth Robinhood penny stock pick is Expion360 Inc. (NASDAQ: XPON).
I’m watching the EV sector in 2023 as it tries to regain its 2021 form …
Sector leader Tesla Inc. (NASDAQ: TSLA) is up nearly 100% from its early January low. But it can’t hold a candle to a smaller EV stock like XPON.
Why I Like It
It’s on a multi-month run.
The spike started back in December. It’s gained 400% since then.
The float is only 3.9 million shares.
XPON is in the lithium-ion battery business. Those are the most popular batteries for EVs, computers, and smartphones.
I’m mainly watching for panic dip buys. XPON is a bit overextended.
I’ve already traded it a few times, $90 here (starting stake $9,300), $340 there (starting stake $4,500).
Remember, small gains add up. That’s what it’s all about.
Watch as this chart continues to develop …
7. Intuitive Machines (NASDAQ: LUNR) — Not a Penny Stock, Not the #NextHKD
My seventh Robinhood penny stock pick is Intuitive Machines (NASDAQ: LUNR).
This is a space SPAC play …
Why I Like It
Well, we already spoke about the opportunities involved with SPACs.
LUNR’s volatility showed in a 1,200% spike in February. Online traders were called it “#TheNextHKD.”
The biggest similarity it has to HKD is that it fell apart after its spike. Just like a penny stock.
Remember this chart well, its the basis for my 7-step framework, @30DayBoot & @completepenny & you must study not to fall prey to greed/ignorance or you'll get wrecked like 90% of traders. It's VITAL to sell into excessive strength/hype, do not just hold & hope like most newbies pic.twitter.com/QsAGHsI6lp
There are a lot of bagholders right now. People that bought at the top of the spike. Now they sell into every subsequent bounce. That’ll make a breakout tough …
If the price is going to break out again we’ll need a hot press release and a lot of trading volume.
But I’m watching it more for bounces as it trends down.
8. Terran Orbital Corp. (NYSE: LLAP) — The Penny Stock Sympathy Play
My eighth Robinhood penny stock pick is Terran Orbital Corp. (NYSE: LLAP).
This is a sympathy play to LUNR. A sympathy play is a stock that runs because it’s similar to another stock that spiked really high.
Why I Like It
When LUNR spiked 1,200%, LLAP gapped up 100%. Unlike LUNR, it’s held onto most of its gains.
It signed a billion dollar contract… But I think a greater part of its appeal was that it’s part of the same sector as LUNR.
This is the kind of predictability that makes the penny stock niche so profitable. These patterns happen over and over again.
- It’s fairly simple to find a sympathy play spiking off momentum from a big runner.
- A lot of the catalysts are the same: SPAC, earnings winner, stocks in hot sectors like EVs …
Pay attention to the process and it’ll all start to make sense.
What to Consider When Trading Penny Stocks
Penny stocks are volatile and unpredictable, so while there’s a chance of big gains, there’s also the risk of major losses. This means you shouldn’t invest in penny stocks — just trade them.
If you’re getting into penny stocks, it’s not enough just to read my stock picks. You need to build your own knowledge account so you can make informed decisions.
Here are four things to consider as a penny stock trader:
A good way to see whether a penny stock is worth buying is to check its price history. If the stock’s chart shows that it has run before, there’s a good chance that it can run again.
The market is based on supply and demand. If there’s a lot of demand — more trading volume than usual — it can drastically affect price.
Besides for price, this is the single most important indicator in penny stock trading.
Stock prices usually move for a reason, and newsworthy changes often cause prices to rise. But look at how the market is reacting before you trade.
The penny stock world is rife with deception, which brings me to my last point …
There’s always the possibility — heck, the probability — of scammers driving penny stock momentum. Pumps are especially common in this world, because it’s easier for gullible newbies to buy penny stocks than high-priced stocks.
If you see social media chatter about buying a popular penny stock, don’t buy it impulsively. Do your research and determine whether the stock is worth trading before making any decisions.
How to Buy Penny Stocks on Robinhood
Buying penny stocks on the Robinhood app or website is just like buying any other stock. Now that you’ve learned how to find penny stocks on Robinhood, here’s how to buy them:
- Log into your Robinhood account.
- Use your debit card or bank account to transfer funds into your Robinhood account.
- Choose a penny stock to buy.
- Select your order type (i.e., market, limit, stop loss, stop limit, or trailing stop order … I never use market orders for trading penny stocks).
- Input how many shares you want to buy.
- Review your order and ensure everything is correct.
- Confirm your trade.
Trading Fees on Robinhood
Robinhood doesn’t impose trading fees on its users. However, the Financial Industry Regulatory Authority (FINRA) is legally obliged to charge a fee, which you have to pay, on stock sales.
The trading activity fee for stock sales is $0.00013/share and $0.00218/share for options sales, with a maximum fee cap of $6.49. Robinhood only charges this fee if you sell more than 50 shares in one penny stock transaction.
Quick Tips to Making Money With Penny Stocks
Penny stock trading can bring in a lot of money, but it’s also a risky proposition — you could lose big if you aren’t careful. Here’s what you should do when you’re trading penny stocks:
- Cut your losses quickly because penny stocks are volatile by nature.
- Focus on small gains, and don’t overcommit to a stock.
- Concentrate on day trading instead of holding penny stocks for long-term gains.
- Research the company before buying its stock, and keep track of industry news.
- Follow your trading plan.
- Trade with money you can afford to lose. Even in the worst-case scenario of losing everything you spent on penny stocks, you’ll still have a safety net.
Looking for more money-making tips with penny stocks? Learn from my 20+ years of experience by applying for the Trading Challenge and reading my FREE book right now.
What Is the Minimum Needed to Buy Penny Stocks?
Robinhood doesn’t have a minimum amount for penny stocks — or any stocks — that cost $1 or more. You can start trading fractional stocks when a stock reaches that threshold.
Penny stock trading is a great way to build your account as a new trader. Robinhood is an okay place to trade stocks as a beginner because it doesn’t have fees and minimum deposits. However, it’s missing many of the capacities I look for in a broker. I recommend you move to another broker as soon as you can.
While I’ve given you eight stocks to watch on Robinhood, don’t just copy my penny stock picks blindly. Learn why I picked them and choose your own stocks to watch.
Have you checked the penny stocks on Robinhood? What are your penny stock picks?
As many of you already know I grew up in a middle class family and didn't have many luxuries. But through trading I was able to change my circumstances --not just for me -- but for my parents as well. I now want to help you and thousands of other people from all around the world achieve similar results!
Which is why I've launched my Trading Challenge. I’m extremely determined to create a millionaire trader out of one my students and hopefully it will be you.
So when you get a chance make sure you check it out.
PS: Don’t forget to check out my 30 Day Bootcamp, it will teach you everything you need to know about trading.