A penny stock is usually an up-and-coming company. These are stocks that trade for $5 or less in Australia. Despite the huge risk/reward ratios associated with penny stocks, other regions have different definitions.
Find the best penny stock platforms in this guide. Additionally, we discuss the many metrics that should be considered when trading this asset class and opening a penny stock platform account.
CMC Markets – There Is No Deposit Fee For Penny Stock Trading
Best Penny Stock Trading Platforms Australia Reviewed
Consider many factors when choosing the best penny stock trading platform for your financial goals.
Can the trading platform provide you with penny stocks, and how much commission will you pay? Moreover, check whether or not the trading platform is regulated and the minimum deposit/trade size.
After taking all of this into account, here are the best online Penny Stock Trading Platforms in Australia!
1. Capital.com – Penny Stock Trading Platform Suitable for Beginners
Trading stocks is a challenge even in the best times, especially penny stocks. So selecting a platform that is easy to use and appropriate for beginners is important if you’re new to this field.
With a minimum deposit of just $20, Capital.com is the best penny stock trading platform for beginners. Furthermore, Capital.com’s trading platform itself is easy to use and can be accessed through your web browser or mobile app.
Additionally, Capital.com offers a demo account facility if you want to test your penny stock trading strategies before investing real money. Finally, Capital.com provides many educational tools and resources to help you along the way. They include stock market guides and mini-courses.
Capital.com offers 18 exchanges where penny stocks can be traded. In addition to markets in the U.K., U.S., and Japan, this includes markets in the UK, Spain, Russia, Hong Kong, Canada, Italy, and more. In addition, commission-free trading is available on all penny stocks hosted by Capital.com.
Please note that the only fee involved in trading is the spread. In general, blue-chip stocks are typically very competitive – which is why penny shares tend to cost more. At Capital.com, you can trade CFDs for all financial markets. In other words, you can leverage a penny stock and even short it.
Your location and trading status will affect your leverage limits. You can choose from credit card, debit card, or e-wallet to benefit from the $20 minimum deposit. The FCA and CySEC regulate Capital.com regarding safety. The Capital.com platform is exclusive to CFDs, so U.S. citizens cannot register.
2. Pepperstone – Penny stock trading platform based in Australia
A penny stock trading platform based in Australia, Pepperstone provides online CFD trading. Furthermore, you'll be able to access a wide range of financial instruments - all with competitive commissions and spreads.
In addition to currency spread betting pairs such as GBP/USD and EUR/USD, commodities like oil and gas, and indices such as the FTSE 100, penny stocks, and Dow Jones, the company offers spread betting opportunities. In addition, Pepperstone offers three trading platforms when you open an account. There is MetaTrader 4, MetaTrader 5, and cTrader. Traders in Australia are hugely partial to these platforms because of their host of tools and features.
Several types of information are available, including pricing data, chart reading tools, and technical indicators. You can also set up automated expert advisors (EAs) at Pepperstone when you spread bet. That allows you to trade completely passively. Depending on your choice of the trading platform, you will pay a different commission.
Additionally, spreads fluctuate based on the asset class and market conditions. As a result, the spread can be lowered to zero in some cases, such as major Forex pairs. As a result, Pepperstone spread betting fees are among the lowest in the market.
When withdrawal requests are received in the morning, they are usually processed the same day. Several regulatory bodies regulate Pepperstone's safety, including the FCA.
CFD trading fee
Forex trading fee
Spread, 1.59 pips for GBP/USD
Crypto trading fee
Spread, 50 pips for Bitcoin
Spreads are very narrow - often 0.01 on major pairs of F.X.
3. AvaTrade – A Reputable Penny Stock Trading Platform With A Huge Market Selection
Another popular penny stock trading platform Australia is AvaTrade. Despite not being regulated by the FCA, the platform is licensed by several other government agencies. These include Japan, Canada, South Africa, and more.
Over 200 tradable markets on the AvaTrade platform—a complete stock market overview, including commodities, indices, forex, bonds, and ETFs. With most instruments, you can trade for as little as $0.10. So if you want to trade penny stocks without risking a lot of money, this is the way to go. We will be trading with the MT4 platform. You can access this on the AvaTrade website.
In addition to the mobile app and desktop software, MT4 is also available as desktop software. When you plan to spread bet on the move, you may want to consider the former. The spread is built into everything at AvaTrade when it comes to fees. Depending on the market, however, the spread will differ. Spreads on forex and indices are generally competitive - particularly when trading major markets.
Our favorite aspect of AvaTrade is that there are a lot of educational resources on the platform. Furthermore, it provides market insights, research, and analysis.
You can open an account with AvaTrade in just one minute if you wish to spread bet right now. Debit/credit cards or bank transfers can fund deposits. Despite this, spread betting starts from just £0.10 per point, and the minimum deposit is £100.
CFD trading fee
Forex trading fee
Spread. 0.9 pips for EUR/USD
Crypto trading fee
Commission. 0.25% (over-market) for Bitcoin/USD
$50 per 3 months after 3 months
A trading platform dedicated to forex options
CFD trades for stocks, currencies, and commodities
4. FXCM – A 100% commission-free penny stock trading platform Australia
The company offers spread betting and CFD trading as two of its main markets. A popular penny stock trading platform Australia specializes in penny stocks, indices, and commodities. Unlike Pepperstone.
FXCM offers a 100% commission-free service, one of the greatest selling points. There is only one fee, which is the spread. Both long and short markets are available at FXCM on their penny stock assets. The spread bets you can place with FXCM with small stakes are also attractive.
The minimum deposit required by FXCM is just £50 to get started. Then, with just a few minutes of setup, you can choose credit/debit cards, electronic wallets, or bank wires. You shouldn't be concerned about safety if you've never heard of FXCM before reading this review. Since 1999, the broker has been regulated by the FCA. A large customer base is also on the platform, most of whom are located in the U.K but are available in Australia.
CFD trading fee
Forex trading fee
Crypto trading fee
$50 after one year of inactivity
MetaTrader 4 and Ninja Trader are supported
at a reputable and established broker
offering CFDs and spread betting
Mobile trading app
A limited selection of shares and ETFs
Limited financial instruments compared to other brokers
5. IG – Trusted Penny Stock Trading With Over 17,000
The IG penny stock trading platform is one of the most popular platforms in Australia. Since 1974, the broker has been regulated very strongly. Besides being licensed by the FCA, its parent company is listed on the London Stock Exchange. I.G. offers traditional shares, funds, as well as CFDs, and spread betting
There are over 17,000 spread betting markets to choose from with this platform. Furthermore, you'll be able to choose from more asset classes than any other spread betting site. These investments are forex, indices, shares, commodities, and even digital currencies like Bitcoin.
Leverage is available in every penny stocks market offered by I.G. Depending on the type of currency, this ranges from 1:2 (cryptocurrencies) up to 1:30 (major currency pairs). You could obtain leverage of up to 1:222 if you are deemed a professional trader. With spreads starting at 0.1 pips on indices and shares, 0.2 pips on cryptocurrencies, and 0.6 pips on forex, you can trade quickly. Additionally, commissions are included in the spread.
A 0.10% variable spread is only applicable when you have spread betting shares. By depositing £250, you can open an account with I.G. if you believe the penny stock trading platform meets your needs. Bank transfers and debit/credit cards are accepted. Funding your account is free unless you use your credit card (0.5%-1%). That's it.
CFD trading fee
Forex trading fee
Crypto trading fee
funding charge of 0.0694%
$12 per month after 2 years
Longstanding reputation as a trusted broker in Australia.
6. CMC Markets - There is no deposit fee for penny stock trading
CMC Markets was founded in 1989 and is a globally recognized CFD broker. The sector is regulated by many top-level financial authorities, including the FCA, ASIC, and MAS. The ticker symbol CMCX is currently used by CMC Markets on the London Stock Exchange for transparency.
The products available at CMC Markets are mainly CFDs and forex products, and therefore only allow trading in CFDs, cryptocurrencies, and forex. Therefore, this penny stock trading platform might not be the best option for traders interested in bonds, real stocks, and futures.
You can trade 8,000 stocks and 1,000 ETFs with CMC Markets. CMC Markets charge commissions for stock CFD trades at $0.02 per share. Similarly, no account or deposit fees are charged by CMC Markets when it comes to non-trading fees. Next Generation, the company's trading platform, and MetaTrader 4, a third-party trading platform, are available to users.
CMC Markets fees
CFD trading fee
Forex trading fee
Crypto trading fee
£10 monthly after 1 year
There is no deposit fee
You can make payments using a bank transfer, debit or credit card, or an e-wallet
Low non-trading fees
Deposit as little as $0
MT4 or Next Generation trading platform
Refundable virtual account balance for practicing trades with the demo trading account
CMC Markets does not allow you to change the leverage level
Generally, penny stocks are considered by most investors due to the potential for significant gains in a relatively short time frame. Penny stocks, however, are highly volatile and speculative, so they are not too dissimilar from cryptocurrencies.
If you want to open an account with a penny stock trading platform, you must understand the risks and potential rewards.
What are Penny Stocks?
As we briefly discussed earlier, Penny stocks don't have a universally accepted definition. A penny stock, for example, is any equity trading at less than $5, as defined by the Securities and Exchange Commission (SEC). The SEC classifies penny stocks as security, yet a company can still possess the characteristics of more stable equity even though it falls in that category.
In the case of Opko Health, its share price is $4.31 at the time of writing - which means it is considered a penny stock by the SEC. Moreover, to being listed on the NASDAQ, this medical testing company has a market capitalization of almost $3 million.
To be clear, penny stocks are generally defined by many subjective factors, such as trading on the OTC market, highly volatile, and lacking liquidity. The details will be discussed later.
Penny stocks aren't subject to the same rules as other equities unless traded on a major exchange. The Securities and Exchange Commission (SEC) or the appropriate banking or insurance regulatory bodies must receive current financial reports from a company seeking to list its securities on the OTCBB. To qualify for the OTC Link system, companies are not required to meet any listing requirements.
These companies can be listed on its OTCQB markets provided they comply with the SEC or a U.S. bank, thrift, or insurance regulator. On OTC Pink are listed the companies that do not meet a minimum financial standard or whose regular reports do not meet regular reporting requirements.
Investment in Australian penny stocks comes with a range of benefits and risks, including:
Low prices. Investing in penny stock companies is relatively inexpensive, so investors can diversify their holdings without spending as much as they otherwise would.
It is often possible to find great growth opportunities among recently listed small-cap companies. That could, however, be a bumpy road.
Thrilling. Stock prices of penny stocks can fluctuate dramatically in a short period, which is exciting and thrilling to investors with a high-risk tolerance.
Day trading. Day traders often use penny stocks because of their large price swings.
Comparatively to other listed companies and ETFs with a longer track record, penny stocks are high-risk investments. Many penny stocks never attain anything more than being penny stocks. Moreover, not every company that lists on an exchange does well.
Very volatile. Within a day or two (or maybe even within the same day), penny stocks often experience extreme share price highs and lows.
No income. As all revenue is usually reinvested into growing the company, penny stocks rarely pay dividends.
Platform & Usability
In terms of your spread-betting platform, you need to ensure that you can spread bet in an environment that resembles your current environment. For example, MT4/5 is the platform of choice for some Australian penny stock trading platforms. Capital.com, for instance, offers a proprietary platform that is less complicated to navigate and just as powerful.
If you are an experienced trader, having access to charting tools and technical indicators is essential. Additionally, you can start trading straight away using your main web browser with web-based trading platforms since no software needs to be downloaded.
Trading Tools & Features
If you invest in Australian penny stocks, please ensure your platform offers tools and features suitable for your financial goals.
Before signing up with a broker, make sure they offer leverage for penny stock trades.
Additionally, if you'd like to deploy an automated penny stocks strategy, you need to be sure that your chosen broker supports MT4/5 in addition to being able to use MT4.
Education, Research & Analysis
It's much more complicated to invest in penny stocks than in shares. So before you start investing in penny stocks, you should learn how they work.
You might find it easier to make sense of your situation by using an Australian penny stocks platform with many educational resources and guides. You will not have to use an external platform to get your training using this approach.
Many tools enable users to research and analyze with the best Australian penny stock brokers. Penny stocks are a short-term financial arena, so this is more important than you think. To determine which way the markets are likely to move, you'll need the help of technical analysis tools and fundamental market research.
Mobile App and Device Compatibility
Clients who invest in penny stocks often choose brokers with mobile apps. There are several reasons for this. For example, you can keep tabs on the markets anytime with an app dedicated to penny stocks.
At the push of a button, you can easily switch positions no matter where you are. Additionally, you will also be able to close a losing trade by simply opening the app. If you don't see the penny stocks app on your device, make sure it is compatible with your system. Unfortunately, this is only available on Android and iOS devices most of the time, although this covers 99% of the market anyway.
The penny stock trading platform you choose will ultimately determine the payment methods they support. For example, most penny stock trading platforms allow you to transfer money from your bank account, but this process can take several days. As a result, we prefer platforms that support debit/credit cards and e-wallets.
Depositing funds to your account is quick and easy with this method. If you choose a payment method, check what fees are associated with that method (if any) and how long withdrawals usually take.
Penny Stocks Strategy
After discussing the pros and cons of trading penny stocks, let's now discuss strategies. It is important to have a solid plan before accessing a speculative market like penny stocks.
We have listed some strategies below to point you in the right direction as a newbie penny stock trader.
It is important to consider diversification as a penny stock strategy. But you should avoid putting all your eggs in one basket. For example, let's say you want to invest $1,000 in penny stocks.
If you are an inexperienced investor, you might decide to spread this $1,000 across just two penny stocks you like the look of. The investor will almost certainly lose money if either of these selections does not perform well.
As opposed to this, an experienced trader will invest in as many penny stocks as possible. One of the best penny stock online exchanges we found lets you trade from just $1 regardless of the share price. Investing in 100 different penny stocks at $10 each would mean that you could potentially earn $100. Only one of your penny stocks would need to increase value to make the process worthwhile.
Furthermore, you are decentralizing your risk by investing in 100 different companies so that you won't become overly reliant on any one stock.
Avoid Small-Cap Penny Stocks
The definition of penny stocks will differ according to the jurisdiction, as we've explained repeatedly in this guide. However, penny stocks possess little liquidity, are highly volatile, and trade on OTC markets.
Nevertheless, many penny stocks trade on public exchanges. For example, in the case of Nokia, its shares trade at under €3.50 per share - even though it is valued at over €20 billion. Thus, it is possible to avoid overly volatile stocks and cause low liquidity levels by choosing companies with similar low stock prices and large market valuations.
How To Get Started With A Penny Stocks Platform in Australia
It can be confusing for novice traders to get started with penny stocks. So we're going to cover how to open a brokerage account and trade penny stocks with low fees and copy trading tools in this section.
Therefore, our tutorial is based on Capital.com since it's one of the top penny stock trading platforms out there, offering low non-trading fees, low commission on stock CFD trades, and user-friendly mobile and web platforms.
Step 1: Open a Trading Account
Get started in a matter of seconds. First, click the 'Trade Now' button on the Capital.com official website to initiate a trade. You will be directed to a sign-up form after clicking this link, where you will have to provide information about yourself. Once you have created a trading account, you will be asked to choose a username and password.
Since Capital.com is regulated by several top-tier financial regulators, including the U.K.'s FCA, ASIC, NBRB, and CySEC, all new users must go through the KYC process. In addition, upload a copy of your passport or driving license as proof of identity and a copy of a recent utility bill or bank statement as proof of address.
Step 3: Deposit Funds
Once you have your account verified, you'll be able to trade various assets with a single click. In addition, you can deposit as little as £20 at Capital.com. In addition to debit and credit cards, bank wire transfers, and e-wallets such as PayPal, Neteller, and Skrill are accepted.
Debit cards and e-wallets are instant, and there are no deposit fees to worry about. As a result, bank transfers typically take four to seven days to be processed.
Step 4: Start Trading with Penny Stocks
You can now use the search bar or tap the Markets tab to find the financial market you want to start penny stocks. For example, you can trade CFDs, forex, the best ETF CFDs, copy trade, and more at Capital.com.
To conclude, penny stock trading is not for the faint of heart. Besides being speculative and volatile, penny stocks often have extremely low liquidity levels. So when you decide to sell, you might have a hard time finding a buyer.
We discovered that Capital.com offers the best penny stock trading platform for Australians if this is an investment sector that interests you. You can trade penny stocks without commissions on the 17 markets that offer thousands of shares. In addition, it has a $50 minimum trade size, so you can begin trading penny stocks with modest amounts.
Capital.com - Best Penny Stock Trading Platform Australia
Depending on the type of investor you are. You should not invest in penny stocks if you wish to build a long-term portfolio through risk-averse strategies. Penny stocks are more appealing to speculators who enjoy the thrill of high risk and high returns.
Are penny stocks legal in Australia?
There is nothing illegal about penny stocks, but they are often manipulated. The name penny stock refers to the low share price of these stocks. Penny stocks are generally defined as stocks trading below $5 a share. Low share prices could mean many things: a new company just getting off the ground; an established company that has been struggling; or an imaginary company! Unfortunately, Penny stocks present a problem in that it is difficult to determine which of these situations is true.
How do Australian penny stocks platforms make money?
Platforms that trade penny stocks in Australia make money by charging trading fees. The spread is usually the difference between an asset's buy and sells price, typically involved here.
What is the best penny stocks trading platform in Australia?
It turns out that Capital.com is the best platform to trade penny stocks in Australia. With thousands of shares available across 17 markets, penny stocks can be purchased and sold without paying a commission. In addition, there is a minimum trade size of just $50, so you can participate in your chosen penny stock market with a modest investment.
Are penny stocks trading taxable in Australia?
The profits on the shares are taxed on the entire profit, or 50% of the profit if you hold them for a long time. If you hold the shares for less than 12 months, you will pay tax on the entire profit. After 12 months, you only pay tax on 50% of the profit.
About Jhonattan Jiménez
About Jhonattan Jiménez
English Language professional with a vast experience teaching English as a second language, English translator to Spanish, Cryptocurrency enthusiast, interested in geopolitics and economy.