“How do I buy stocks on line?” That is probably the most common question I receive. And clearly, someone unable to determine how to buy stock online on their own needs to learn a lot more than just the technical matter of where or how to buy. But since this question is asked so much, I will try to give you a quick and concise answer here. As anyone who reads my material knows, I have a hard time just keeping to the basics on these issues… because no matter how many people try to simplify them, they’re not basic at all — and it is important to understand that!

For example, I can come up with a couple of completely different answers for the basic question, “Where to do I buy stocks on line?” Which answer you find more useful and appropriate largely depends on what your motivation was in asking the question. It also depends on what level of investor you are (but dare I say you’re likely a novice if you’re asking this question?). So before we examine where to buy penny stocks, let’s examine what you’re really asking and why.

Buy Stocks On Line Through Stock Exchanges or Quotation Services?

One answer may seem simple at first: the stock exchanges! But it isn’t that simple. What stock exchange or quotation service should you use to find your stock? NASDAQ? NYSE? The Pink sheets? The OTCBB? Some of these aren’t stock exchanges at all, but rather quotation services. They provide raw data on the current known prices of the stocks but don’t in any way facilitate the trading of that stock. For example, many of the stocks listed on the Pink Sheets by the Pink OTC Markets are not required to file with the SEC (Securities and Exchange Commission) and thus do not fulfill the same standards as stocks listed on the major exchanges (New York Stock Exchange and NASDAQ). But this doesn’t mean you still can’t buy these stocks on line.

For my comprehensive discussion of penny stock quotation services, visit this page: OTC Market: OTCBB and Pink Sheets

Buy Stocks On Line From Discount Stock Brokers or Full Service Brokers?

And the other answer is superficially simple as well. A stock broker! But… which stock broker? Do you go with one of the heavily advertised discount stock brokers like E*trade (you know you love the E*Trade baby commercial!) which provide you tools and allow you to execute your trades inexpensively but don’t provide a much, if any, consulting or personal assistance?

Or do you go with a full-service broker where they execute the trades for you as well as provide you with detailed assistance in understanding and planning your investments? The full-service brokers will be more expensive and executing trades can often be far more expensive, but be realistic about your experience and knowledge level. If you’re just learning the ropes, you’ll probably be better off spending a little extra money to have someone help you through the shark-infested waters of online trading.

For my comprehensive review on top online stock brokers, read this page: Best Penny Stock Brokers

Stocks, Bonds, Futures, Penny Stocks, Oh My!

And last but not least, what exactly does someone mean when they say they want to buy stocks on line? There are all kinds of stocks and even all kinds of different strategic paradigms for each of those different kinds of stocks. Planning for retirement with long-term investments in mutual funds is a completely different ball game than day trading.

And researching and buying a blue chip stock is a completely different game from researching and buying penny stocks. So have penny stocks piqued your interest? I hope you know more than they’re name, because penny stocks aren’t cheap and they’re laden with risk. Penny stock trading can be exciting and rewarding, but it isn’t for the feint of heart.

So learn how to answer these questions for yourself before you impulsively go about investing your money online. Online investing, or online trading, requires just as much due diligence and technical analysis as any professional endeavor. Don’t treat it like a whimsical game. Be wise and meticulous as you explore how to buy stocks on line.

I hope this helps and thank you for reading Penny Stock Trading.