Penny stocks under $5: trading guide (strategies + brokers)

Trading low-priced stocks under $5: the ultimate guide

Discover how to trade penny stocks under $5 without getting burned. We reveal 5 high-risk/high-reward strategies, current stock picks, and the best brokers for trading these volatile assets. Learn to navigate the wild world of low-priced stocks in 2025.

Trading low-priced stocks under $5: strategies, top picks, and best FX brokers

Trading low-priced stocks under $5

Low-priced stocks under $5 – often called “penny stocks” – are like the wild west of trading. They can skyrocket 100% in a day… or crash and burn just as fast.

Want to trade these ultra-cheap stocks? Buckle up. We’re breaking down:
✅ How to trade them (without blowing up your account)
✅ The best (and worst) strategies
✅ 5 real stocks under $5 right now
✅ The top brokers to trade them

 

Why trade low-priced stocks under $5?

Why trade low-priced stocks under $5?

🔥 The good: why traders love penny stocks

  • “Lottery ticket” potential – A 1stockcanjumpto5 fast (500% gains!).
  • Cheap entry – No need for thousands – just $100 can get you started.
  • Meme stock mania  – Stocks like AMC, GameStop, and Sundial Growers prove small stocks can go viral.

💀 The bad: why most traders lose money

  • Pump and dumps – Scammers hype stocks, then dump shares on retail traders.
  • No liquidity – Ever tried selling a stock and NO ONE is buying? Yeah, that happens.
  • Delisting risk – If a stock stays under $1 too long, it gets kicked off exchanges.

 

5 crazy (but effective) low-priced stocks trading strategies

5 crazy (but effective) low-priced stocks trading strategies

1. The “meme stock hunter” strategy

  • How it works: Find stocks blowing up on Reddit, Twitter, or Discord.
  • Example: BBBY went from $ 0.50 to $6 in days during the meme stock frenzy.
  • Risk levelExtreme.

2. The “earnings roulette” play

  • How it works: Buy before earnings, hope for a massive beat (or short squeeze).
  • Example$CLOV once jumped 100% in a day after earnings.
  • Risk levelHigh (Earnings can also crush the stock).

3. The “dead cat bounce” trade

  • How it works: A stock crashes hard, then bounces briefly – scalp the rebound.
  • Example: NIO dropped from 40 to 5, then bounced to 15.
  • Risk levelMedium (Timing is everything).

4. The “FDA approval lottery”

  • How it works: Biotech stocks under $5 surge on FDA news.
  • Example: ATOS went from $ 1 to $9 on cancer drug hype.
  • Risk levelVery high (Most bioteaks fail).

5. The “reverse merger pump”

  • How it works: A shell company merges with a real business – stock explodes.
  • Example: 10 to $175.
  • Risk levelNuclear (Most reverse mergers crash).

 

Top 5 low-priced stocks

Penny stocks (under $5) can deliver explosive gains – or wipe out your account fast. If you’re hunting for potential multi-baggers in 2025, here are 5 high-risk, high-reward picks worth watching.

(⚠️ Warning: These are speculative plays – do your research before investing!)

Stock Price Market cap Why it could surge Risk level
Tuya (TUYA) $1.99 $1.12B IoT & AI growth leader in China 🎲🎲 (Medium)
Kiora Pharma (KPRX) $3.02 $8.61M Biotech breakout potential 🎲🎲🎲 (High)
QuantaSing (QSG) $3.08 $198M China edtech & AI play 🎲🎲 (Medium)
Lifetime Brands (LCUT) $3.82 $84M Undervalued household goods stock 🎲 (Low)
New Horizon Aircraft (HOVR) $0.48 $15M eVTOL aviation disruptor 🎲🎲🎲🎲 (Very High)

Key details:

  • 📅 Data as of April 2025
  • 💰 All stocks priced under $5
  • ⚠️ Penny stocks are high-risk – never invest more than you can afford to lose

 

Top Forex brokers for trading low-priced stocks

If you’re looking to trade low-priced stocks alongside forex, these brokers offer strong platforms, low fees, and access to global markets:

eToro

Why choose eToro?

  • Offers real stock trading (not just CFDs), including many penny stocks
  • Fractional shares let you invest small amounts (as little as $1)
  • Copy Trading feature to mimic successful traders
  • User-friendly platform perfect for beginners
  • Regulated by FCA, CySEC, and ASIC

98
Min. deposit
50$
Min. Spread
0.5
Bonus
Max. leverage
1:30
Used by
30000000+
Trading platforms
Own Platform
MetaTrader 4
MetaTrader 5
Web trader
Deposit methods
Trustly, iDEAL, Rapid, Klarna, Wire
! 51% of retail CFD accounts lose money.
Regulated by
FCA
CySEC
ASIC
98
Min. deposit
50$
Max. leverage
1:30
Bonus
Used by
30000000+
Min. Spread
0.5
Trading platforms
Own Platform
MetaTrader 4
MetaTrader 5
Web trader
Deposit methods
Trustly, iDEAL, Rapid, Klarna, Wire
Regulated by
FCA
CySEC
ASIC
Open account
! 51% of retail CFD accounts lose money.

Risk disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

 

XTB

Why choose XTB?

  • Commission-free real stock trading (2,100+ stocks)
  • Advanced xStation 5 platform with great charting
  • Tight forex spreads from 0.1 pips
  • Strong regulation (FCA, CySEC)
  • Good educational resources

98
Min. deposit
-
Min. Spread
0.5
Bonus
Max. leverage
1:500
Used by
656997+
Trading platforms
Own Platform
MetaTrader 4
MetaTrader 5
Web trader
Deposit methods
Bank Transfer, PayPal, Credit/Debit Cards, Neteller, Skrill
! Trading is a risky activity. Up to 74-83% of traders lose their money
Regulated by
FSC
CNMV
KNF
FCA
CySEC
98
Min. deposit
-
Max. leverage
1:500
Bonus
Used by
656997+
Min. Spread
0.5
Trading platforms
Own Platform
MetaTrader 4
MetaTrader 5
Web trader
Deposit methods
Bank Transfer, PayPal, Credit/Debit Cards, Neteller, Skrill
Regulated by
FSC
CNMV
KNF
FCA
CySEC
Broker type
Forex & CFDs
Open account
! Trading is a risky activity. Up to 74-83% of traders lose their money

 

AvaTrade

Why choose AvaTrade?

  • Supports MetaTrader 4/5 for algorithmic trading
  • Over 1,000 stock CFDs, including some penny stocks
  • Multiple account types (including Islamic accounts)
  • Regulated by Central Bank of Ireland, ASIC

97
Min. deposit
50$
Min. Spread
0.1
Bonus
Max. leverage
1:400
Used by
350000+
Trading platforms
Web Platform
ZuluTrade
MetaTrader 5
MetaTrader 4
Deposit methods
Bitcoin, Sofort, UnionPay, Credit/Debit Cards, Neteller, Wire, Skrill
Regulated by
ISA
ADGM
FFA of Japan
FSA of Japan
FSCA of South Africa
Central Bank of Ireland
CySEC
FSC of BVI
ASIC
97
Min. deposit
50$
Max. leverage
1:400
Bonus
Used by
350000+
Min. Spread
0.1
Trading platforms
Web Platform
ZuluTrade
MetaTrader 5
MetaTrader 4
Deposit methods
Bitcoin, Sofort, UnionPay, Credit/Debit Cards, Neteller, Wire, Skrill
Regulated by
ISA
ADGM
FFA of Japan
FSA of Japan
FSCA of South Africa
Central Bank of Ireland
CySEC
FSC of BVI
ASIC

 

XM Group

Why choose XM?

  • $5 minimum deposit (great for small accounts)
  • Ultra-low forex spreads
  • No re-quotes or hidden fees
  • Strong regulation (CySEC, ASIC, FCA)

98
Min. deposit
5$
Min. Spread
0.6
Bonus
Max. leverage
1:1000
Used by
5000000+
Trading platforms
MetaTrader 5
MetaTrader 4
Web trader
Deposit methods
Bitcoin, Sofort, UnionPay, Neteller, Wire, Skrill
Regulated by
FCA
CySEC
IFSC
ASIC
98
Min. deposit
5$
Max. leverage
1:1000
Bonus
Used by
5000000+
Min. Spread
0.6
Trading platforms
MetaTrader 5
MetaTrader 4
Web trader
Deposit methods
Bitcoin, Sofort, UnionPay, Neteller, Wire, Skrill
Regulated by
FCA
CySEC
IFSC
ASIC

 

BlackBull Markets

Why choose BlackBull?

  • Raw ECN spreads from 0.0 pips
  • Fast execution with no dealing desk
  • Good for scalping and high-frequency trading
  • Supports MetaTrader 4/5

98
Min. deposit
-
Min. Spread
0.0
Bonus
Max. leverage
1:500
Used by
-
Trading platforms
Own Platform
Web Platform
MetaTrader 5
MetaTrader 4
Deposit methods
Bank Transfer, FasaPay, Credit/Debit Cards, Neteller, Skrill
Regulated by
FMA
FSA Seychelles
98
Min. deposit
-
Max. leverage
1:500
Bonus
Used by
-
Min. Spread
0.0
Trading platforms
Own Platform
Web Platform
MetaTrader 5
MetaTrader 4
Deposit methods
Bank Transfer, FasaPay, Credit/Debit Cards, Neteller, Skrill
Regulated by
FMA
FSA Seychelles
Broker type
Forex

 

Trading penny stocks under $5 - FAQ

While they offer explosive growth potential (some gain 500%+), most penny stocks fail. We cover safer trading approaches in our strategy section. Ready to start? Use our broker comparison tool to find your perfect match.
From meme stock hunting to FDA approval plays, we detail 5 proven approaches in our guide. Want to implement these strategies? Check our recommended brokers with special sign-up offers.
Top platforms like eToro and XTB offer access, each with different advantages. See our broker breakdown section for exclusive deals and commission comparisons.
Some brokers let you start with just $5, but proper risk management is crucial. Learn more about smart position sizing in our trading strategies section.
Pump-and-dumps, delistings, and extreme volatility top the list. Our risk management guide shows how to protect your capital - click through to the full article for expert tips.