Why the Attraction of Canadian Penny Stocks is Growing

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If you’re wanting to profit from penny stocks, you might want to look beyond the US borders (assuming that is where you live) and more specifically pay attention to Canada.  A lot of investors who specialize in micro cap stocks love Canadian penny stocks and for good reason.

Canadian penny stocks and Canadian stocks in general have performed extremely well the past several years compared to the rest of the world.  Canada, like the US is a very stable democratic country with low risk for political or economic instability.  However, Canada is also extremely rich in natural resources including oil and precious metals which have all been skyrocketing in recent years along with the stocks related to these commodities.  Canadian gold penny stocks and oil penny stocks in particular have done very well and made a lot of penny stock investors small penny stock fortunes!

With that said, how do you get your hands on Canadian penny stocks?  In a nutshell, Canadian penny stocks can be found in five different markets:  the pink sheets, OTCBB, the Toronto Stock Exchange, the TSX Venture Exchange, and to a lesser degree, the Montreal Exchange.   The pink sheets and OTCBB are US markets and trade in USD.  The other three are all Canadian stock markets and thus trade in Canadian currencies.  The Toronto Stock Exchange is by far the largest and most reputable Canadian stock exchange with the strictest regulations.  The Venture Exchange however is probably where you’ll find the most penny stocks and in particular, precious metal penny stocks.

Now that you know a bit about what markets Canadian penny stocks trade in, you really have two main options as far as how to actually buy them.  The first option is to open a Canadian brokerage account whether it be a discount brokerage or full service brokerage.  Some popular Canadian discount brokerage companies include Scotia itrade (formally E*trade Canada), Interactive Brokers, RBC Direct Investing, and CIBC Investor’s Edge.  Full service brokerage firms include BMO Nesbitt Burns, RBC Dominion Securities, and Laurentian Bank Securities.  The second option is to open a US brokerage account that allows trades in Canadian equities or to simply buy Canadian penny stocks via the pink sheets or OTCBB markets.  The OTCBB especially often has the USD equivalent version of a Canadian penny stock that can be purchased in US funds.

No matter which option you choose, buying Canadian penny stocks is not difficult and the rewards can be great.  Just make sure you always peform adequate penny stock analysis  and research on each company just like you would before buying any stock investment.

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1 comment so far ↓

#1 James on 06.02.11 at 3:41 am

Great website. Canadian stocks offer terrific potential especially mining stocks.



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