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Investing in stocks under $10 could significantly increase the returns on your portfolio, especially if you pick the right stock. Also, if you choose stocks in promising industrial sectors or those that have a unique and popular product or service, you stand a much better chance of selling your stock for a tidy profit after the shares have had a chance to appreciate.
Stocks Under $10: The Advantage
An advantage of stocks under $10 is that some of these stocks can make a good choice for short and medium-term trading strategies. Buying shares of a lower dollar amount also limits your exposure to risk, since the stock already sells for a low price. The lowest that price can go is zero. Investing in high-priced stocks means you generally have a lot more to lose in the event of a sharp stock market downturn as traders have seen in the recent past.
Investing in any stock carries the inherent risk of the insolvency of the company and other adverse events that can lead to a decline in the stock’s value. This can cause you to lose your entire investment. Some stocks under $10 can suffer from liquidity issues, which can adversely affect your ability to transact large amounts.
However, these stocks are spread across several industries. You might review or search for:
- Top 100 stocks under $10
- Biotech stocks under $10
- Gold stocks under $10
- Cyber security stocks under $10
Best Online Brokers for Best Stocks Under $10
If you want to start buying stocks under $10, as well as stocks under $20 and stocks under $5, any reputable broker that can facilitate stock transactions on U.S. exchanges can buy stock for you. Some of them will even let you trade commission-free, such as Robinhood, for example.
Other commission-free online brokers you can buy stocks under $10 with include TD Ameritrade and E*TRADE. More experienced, well-funded and active traders can use Interactive Brokers, although that broker does charge inactivity fees and has a high minimum deposit requirement.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Over 8,000 different stocks that can be sold short
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- No chat support
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
- Price earnings growth valuations
- Easily evaluate investment opportunities
Ally Invest is a comprehensive broker offering easy access to domestic markets. Combining a wide range of charting tools with an easy-to-master platform, Ally is a solid choice for both new and experienced investors. Ally’s mobile app is particularly impressive for investors who already bank with Ally, offering seamless compatibility between accounts. While more experienced investors might be disappointed with Ally’s beginner-oriented educational center, they’re bound to love Ally’s wide range of technical tools and rock-bottom pricing.
- Investors who already bank with Ally and want to streamline between accounts
- Beginners looking for easy-to-follow educational tools
- Stock investors looking for affordable access to low-priced options and commission-free stock trading
- Streamlined interface that’s easy to use and quick to master — even for beginners
- Wide range of unique tools that makes analyzing securities simple
- Seamless integration between mobile and desktop offerings, especially for Ally Bank account holders
- Diversified managed investment portfolios with a low minimum and no advisory fees
- Impressive ETF screening tools that make it easy to find your next fund
- No fee-free mutual funds
- No access to futures trading
CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.
- Intermediate to Advanced traders
- High-volume traders
- Momentum traders
- Short sellers
- Unrivaled access to short inventory
- Flexible order routing for improved executions
- Discounts for active traders
- Advanced platform with fast executions
- Reliable customer service
- Not designed for beginner or low-volume traders
Features to Look for in Best Stocks Under $10
- Desirable product or service: When selecting a lower-priced stock, one of the first considerations for an investor is whether the company makes a product or service currently in demand and that holds promise for future earnings.
- Good financials: The financials of a lower-priced stock show the company’s assets and liabilities, so you want to look for a company with a solid financial situation. Reviewing financial statements might also indicate any challenges the company is facing that have caused the stock to sell off or if the company’s earnings per share (EPS) have yet to reflect future business possibilities.
- Liquidity: Since liquidity can be an issue with low-priced stocks, you should typically look for those with a minimum daily volume of at least 1 million shares. Liquidity in the stock allows you to transact shares quickly and it gives you the opportunity to trade short-term strategies that work well for inexpensive stocks.
- Potential: When you’re searching for undervalued penny stocks, some of them might be hiding amongst the best stock under $10. Why? Some companies should be trading far higher than $10 per share, and your research might indicate that certain companies are prepared to grow exponentially in the near future.
Are Stocks Under $10 Worth Buying?
The answer to this question is a resounding “Yes!” Cheap undervalued stocks can be a gold mine for investors. Trading under 10 dollars per share helps you save money on your initial investment, the best growth stocks under $10 could profit you quite quickly.
A low-priced stock with a viable product or service, decent financials and a liquid market can provide you with a good store of wealth, an appreciating asset and/or an adequate vehicle for short-term trading.
You do have to choose carefully since some stocks under $10 are definitely headed for insolvency and you could lose your entire investment. Still, depending on your risk profile and your financial goals, buying stocks under $10 as an investment could make a lot of sense and could provide you with a handsome return if you pick the right stock.