DEGIRO Penny Stocks: how to trade Penny Stocks on DEGIRO

What are penny stocks?

As the name implies, a penny stock is typically:

• A micro-cap company that trades at a very low share price;
• Highly speculative and risky due to low trading volume, wide bid-ask spreads, and limited publicly available information;
• Appealing to many investors because it allows them to buy a large number of shares, hoping they are buying the next Amazon or Apple and anticipating a substantial price increase.

Although penny stocks are often assumed to trade below $1, €1, or £1, the SEC defines a penny stock as any share trading below $5. Some trade on regulated exchanges, while others trade over-the-counter (OTC). As a result, not all brokers give you access to buy and sell them. Penny stocks can offer meaningful upside, but you should be equally aware of the significant risks from low liquidity, high volatility, and limited disclosure.

Some examples of low-priced stocks that have been accessible on DEGIRO:

• UK: Lloyds Banking Group, Vodafone;
• France: Nextedia, Solocal Group;
• Germany: Meyer Burger, Leclanché;
• Portugal: Sporting SAD, VAA Vista Alegre;
• Italy: A.S. Roma;
• US: Arcadia Biosciences Inc., ReWalk Robotics Ltd.

Can you trade penny stocks on DEGIRO?

Yes, you can trade some penny stocks on DEGIRO, since the broker provides access to a large number of European and international exchanges where low-priced shares are listed. However, availability depends on the specific exchange where a given stock trades. Importantly, DEGIRO does not offer access to over-the-counter (OTC) markets, so penny stocks quoted only on OTC venues (such as OTC Markets Group’s Pink or OTCQB tiers in the US) will not be tradeable.

Keep in mind that DEGIRO applies a €2.50 annual connectivity fee per exchange you trade on (excluding the primary exchange of your account’s home country), so trading penny stocks across multiple international venues can add up. Standard commissions also apply: US stocks at €1.00 per order, and European stocks typically at €3.90 plus a €1.00 handling fee.

How to trade Penny Stocks on DEGIRO?

To start trading penny stocks on DEGIRO, you simply have to follow the below steps:

1. Open an account at DEGIRO. If you want, you can check our review before proceeding.
   Disclaimer: Investing involves risk of loss.
2. After opening an account at DEGIRO, you have to identify the right penny stock. You can navigate the screener, which gives you access to more than 50 exchanges across 30 countries, and find those stocks that trade at very low prices.
3. We recommend in-depth research before deciding which penny stock to buy. You can check the historical prices to see whether the stock has been trading for some time below $5 or if it has plunged recently due to some information. You must also research the company to determine if it is worth the investment. As it is listed on an exchange, you can check its financial statements and website and read what analysts say about its outlook.
4. Decide if you want to buy or sell the penny stock and click on the “Buy” or “Sell” button. Determine the size of your trade and then choose a stop loss and take profit levels. Once you have all this information, you can execute your order by clicking on the “Place order” button on the screen.
5. You can now begin monitoring your position and regularly checking the news for any company announcements or updates.

Penny Stocks pros and cons

Penny stocks investment tips

After this brief overview of penny stocks – including the risks involved and the potential returns – here are a few practical tips worth keeping in mind when investing in them:

• Research the company thoroughly: only invest in businesses you genuinely understand. Look at revenue, cash position, debt levels, and whether the company has a viable path to profitability rather than relying on narrative alone;
• Use stop-loss orders: it is best to determine a stop-loss level before entering a trade, setting a price limit representing the maximum loss you are willing to accept. Once reached, it triggers an automatic closure of your position. Note that in illiquid stocks, slippage can mean execution occurs meaningfully below your stop level;
• Be alert to penny stock fraud schemes: misleading promotional information is sometimes circulated to artificially inflate prices (“pump and dump”). Stay sceptical of unsolicited tips and update your order limits regularly. This applies particularly to OTC-traded stocks, which face far lighter disclosure requirements;
• Check the total cost of the trade: commissions, exchange connectivity fees, FX conversion costs, and the bid-ask spread can consume a large share of the potential return on a small position. Assess the cost/benefit before executing;
• Size positions appropriately: given the elevated probability of permanent capital loss, penny stocks should represent only a small, deliberately limited portion of a diversified portfolio.

Bottom line

DEGIRO does allow you to trade penny stocks, but availability depends on the exchange where the shares are listed, and DEGIRO does not provide access to OTC penny stocks.

Remember that penny stocks are high-risk investments due to elevated volatility, low trading volume, wide spreads, and limited visibility into a company’s financials and operations. The probability of permanent capital loss is materially higher than with established, larger-capitalisation companies.

For that reason, we believe penny stocks are only suitable for investors with a genuinely high risk tolerance – those who fully understand the risks involved and can comfortably absorb significant losses without it affecting their broader financial position. For most investors building long-term wealth, diversified low-cost ETFs remain a far more reliable foundation.