Young, small, and new Canadian companies focused on the field of commodities and technologies may now take advantage of the opportunities offered to them by Canadian penny stocks and this is their great chance to show their skills and abilities to build a good shareholder value. Canadian penny stocks are available through the Toronto Stock Exchange and the TSX Venture Exchange for only $5 or lower. Indeed, it's a great opportunity not only for companies but for traders as well since Canada is known for its rich natural resources and great manpower as produced by really good Canadian universities.
The participation of a stockbroker is necessary for an individual to be able to buy Canadian penny stocks, as he is the one authorized to buy Canadian stocks. It is also only possible to trade in Canadian stocks trading in Canadian dollars. Of course, when purchasing hot penny stocks, you definitely would like to go for companies that develop good and competitive products and with good sales, since these companies are more likely heading towards a positive direction.
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.
Below are the steps to buying Canadian penny stocks:
If you have plans of purchasing Canadian penny stocks, inform your investor about this plan because he will be the one to contact a stockbroker. The stockbroker will then facilitate the purchase of Canadian penny stocks 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 your investment budget. Keep in mind that investments in stocks trading are more profitable than the conventional stocks trading.
Visit the website of the Toronto Stock Exchange or TSX Venture Exchange everyday or as often as you want to get updates on your Canadian penny stocks. Check how your penny stocks move and grow in the Canadian economy.