Fidelity penny stocks

Fidelity Penny Stocks and OTC Fees in 2024

Fidelity OTC fees: commission charged for buying pink sheets/OTCBB bulletin board/gray market/stocks priced under $1. Fidelity penny stock policy. Can I trade OTC stocks on Fidelity?

Trading OTC and Penny Stocks at Fidelity

If the big equity exchanges aren’t providing the risk-return outlook your investment profile needs, perhaps moving to the over-the-counter marketplace will deliver something more. Fidelity offers exchange traded penny stocks and OTC Pink Sheets to give investors plenty of options to choose from.

Defining the Terms

First, we need to define our terms. Penny stocks can be exchanged-traded securities priced lower than $5. The term can also be used for stocks trading on the OTC Pink or OTCBB markets.

Sub-$5 stocks listed on major exchanges (NYSE, Nasdaq, etc.) are of companies large enough to meet the various requirements of the exchanges. In addition to size, they also have regular reporting requirements that they adhere to. These regulations help create a ‘safer’ environment for investors. They do not have the same level of volatility as their OTC market counterparts.

Fidelity OTC Stocks

Penny stocks trading as Pink Sheets or Grey Market stocks belong to companies that either cant or don’t want to go through the process of getting listed on an exchange. The companies are often small and the risks associated with investing in their stock can be high. The tradeoff for the increased risk is the possibility for much more dynamic price movements.

Fidelity offers trading in all three categories addressed in this article: penny, OTC, and pink sheet securities.

Fidelity Penny Stocks

Searching for OTC Stocks on Fidelity

Finding penny, OTC, and pink sheet stocks at Fidelity is really easy, thanks to the broker’s user-friendly stock screener. To pull up this gadget, log into the website and hover over the News & Research tab in the top website. In the drop-down menu, click on the link for stocks.

Fidelity OTC Trading

On the next page, you’ll see several options that present a variety of search tools for equities. Look for the link that says “Launch Stock Screener.” Now, you’ll have the tool you need.

With the search wizard launched, look in the left-hand column for the categories of search variables. Under basic company facts, exchange is listed. Choose exchange, and you’ll see OTC as one of the choices. Click on OTC and you’ll get a long list of stocks that trade on the over-the-counter marketplace. The day we conducted our research, the scanning tool returned 2,803 OTC stocks.

It’s possible to add other search criteria to narrow down this list. Examples include market cap, return on equity, P/E ratio, market price (which can be used to find penny stocks on any exchange), and many more. The search results can be sorted by several pre-installed criteria.

Example of an OTC Stock at Fidelity

Using Fidelity’s equity screener, we found PHXHF. This is PHX Energy Services Corp. trading on the OTCQB marketplace. The OTCQB is the second-highest OTC tier. In order for equities to be listed here, they must have audited yearly financial statements that conform to GAAP standards.

Fidelity’s profile for PHX shows a price-to-earnings ratio of 14.64, which means the company turned a profit, at least in the most recent quarter. It also recently announced a dividend, which is a good sign.

Fidelity’s profile includes a free stock report from S&P Global Market Intelligence. This pdf file contains tons of data on PHX.

Cost of Trading OTC Stocks at Fidelity

One of the great things about trading penny and over-the-counter stocks at Fidelity is the cost. There are no commissions on these trades when placed online, and Fidelity imposes no surcharges for penny stock or OTC stock trades.

Firstrade as an Alternative

Although 2,800 securities are a decent collection, it is possible to find more than this number at a single broker. Firstrade, for example, has a list of 13,764 over-the-counter stocks. This, at least, was the number we got using the broker’s equity screener during our investigation. Some of these aren’t actually tradable, although the search wizard does serve as a good tool to find what’s available in the OTC space.

fidelity pink sheets

To locate Firstrade’s search engine, hover over the Research & Tools tab in the top menu on the website. Click on Screeners to go to the screeners page. Here, select the Stocks Screeners tab to get the stock search tool (not the ETF or mutual fund screener).

does fidelity charge for otc stocks

In the list of search criteria, once again there is a selection for exchange. On Firstrade’s tool, BB and PINK are over-the-counter choices. The Bulletin Board has been shut down, so the first choice will deliver zero results.

can you trade otc on fidelity

Like Fidelity, Firstrade charges zero commissions and zero surcharges on trades of penny stocks and over-the-counter securities. However, Firstrade does have a few rules that Fidelity doesn’t have:

(1) A stock must trade at greater than $0.10 to be purchased.

(2) Foreign-issued securities (OTC stocks that have the letter ‘F’ in the ticker symbol) aren’t eligible for purchase, either. They can be liquidated through customer service at a cost of $75. Some of the stocks in Firstrade’s 13k+ list are foreign-issued securities.

Open Firstrade Account

Get up to $250 in transfer fee rebate.

Visit Firstrade Website

Updated on 1/26/2024.

Ben Wright
About the Author
Ben Wright is an investor, a trader, an educator, and something of an explorer. He spends his days in the markets when he is not teaching or spending time with his family. Ben writes about stockbrokers, markets, investment vehicles, promotional offers, and tools that help investors make the most of their time in the markets.