Trading penny stocks brokers
Introduction To comply with regulations regarding the sale of unregistered securities and to minimize the manual processing associated with trading shares that are not publicly quoted, IBKR imposes certain restrictions on U.
A list of those restrictions, along with other FAQs relating to this topic are provided below. What is a U. For trading penny stocks brokers of this trading penny stocks brokers, the term Microcap Stock will include the shares of U. As Microcap Stocks are often low-priced, they are commonly referred to as penny stocks.
IBKR may make exceptions, including for stocks traded at low prices that recently had a greater market cap. Trading penny stocks brokers do Microcap Stocks trade? Microcap Stocks typically trade in the OTC market, rather than on a national securities exchange. IBKR clients can prove that shares were purchased on the open market by providing a brokerage statement or trade confirm from a reputable broker reflecting the purchase of the shares on a public exchange.
Clients can establish that the shares are registered by providing the SEC Edgar system File number under which their shares were registered by the company and any documents necessary to confirm the shares are the ones listed in the registration statement. Customers are free to transfer out any shares we have restricted at any time.
Prime customers may clear U. Microcap Stocks at IBKR but those shares will be restricted unless we confirm the shares are eligible for re-sale under the procedures discussed above. To remove the restriction for shares purchased on the open market, please provide an official Account Statement or Trade Confirmation from the executing broker or have trading penny stocks brokers executing broker provide a signed letter, on company letterhead, showing the IB account name and number, stating that the shares were purchased in the open market, along with the details of the executions date, time, quantity, symbol, price, and exchange.
Or if the shares were acquired through an offering the letter must provide documents or links to the relevant registration statement and state that the shares were part of it. Sell Long trades will be accepted if the long position is no longer restricted. Sell Short trades will be accepted.
Buy Long trades trading penny stocks brokers be accepted and the position will be restricted until Compliance is provided with sufficient information to remove the restriction. Buy Cover trades trading penny stocks brokers intraday round trip trades will not be accepted. What happens if a stock you purchase gets reclassified as Grey Market or Caveat Emptor?
If you purchase a stock in your Trading penny stocks brokers account that at a later date becomes classified as a Caveat Emptor or Grey Market stock, you will be allowed to maintain, close or transfer the position but will not be able to increase your position.
Where can I find additional information on Microcap Stocks? Additional information on Microcap Stocks, including risks associated with such stocks may be found on the SEC website: For information regarding Canadian stock transfer restrictions, see KB 1 This includes transfers by any method e. Microcap stocks where the customer can confirm the shares were purchased on the trading penny stocks brokers market or registered with the SEC; Opening orders trading penny stocks brokers U.
Clients with existing positions in these stocks may close the positions; Execution-only clients i. IBKR may make exceptions for U.