Which Are the Best Penny Stocks on NASDAQ to Buy Now?

Investing in penny stocks can be an exciting opportunity for those looking to take advantage of low prices and the potential for high returns. While many U.S. penny stocks are found on the Over-the-counter (OTC) market like pink sheet, there are also some listed on major exchanges like NASDAQ and NYSE, which provide greater transparency and stricter regulation. This guide breaks down the essentials of penny stocks on NASDAQ, including some of the top options and factors to consider before trading.

Does NASDAQ Have Penny Stocks?

Yes, NASDAQ does have penny stocks. While penny stocks are commonly associated with the OTC market, many are also found on NASDAQ. Penny stocks are typically defined as stocks trading below $5 per share, and some common stocks on NASDAQ fit this category due to their low prices and smaller market caps.

The main advantage of NASDAQ-listed penny stocks is that they must meet stricter listing requirements, such as regular financial disclosures and compliance with corporate governance standards. This makes NASDAQ penny stocks a more secure and transparent option compared to OTC securities.

What Are the Top 5 Penny Stocks Right Now?

Here are five of the most popular penny stocks currently traded on NASDAQ:

1. Therapeutics Inc (TPTX)

• Industry: Biotechnology
• Why It’s Popular: Therapeutics Inc is widely known for its innovative treatments. Its ongoing clinical trials and the potential for FDA approvals often put the company in the spotlight.
• Volatility: The stock is highly sensitive to trial outcomes and regulatory announcements. This may lead to sharp price movements.

2. Sundial Growers (SNDL)

• Industry: Cannabis
• Why It’s Popular: Sundial Growers is a key player in the cannabis industry. As the market expands, the company draws attention for its growth potential.
• Notable Feature: The stock frequently trades around $1. If you want to get into the growing cannabis sector with a low entry cost, the stock is a good choice.

3. Ideanomics Inc (IDEX)

• Industry: Electric Vehicles (EVs) and Fintech Solutions
• Why It’s Popular: With the increasing demand for clean energy solutions, Ideanomics benefits from the rising interest in the EV sector.

4. Nokia (NOK)

• Industry: Telecommunications
• Why It’s Popular: Nokia is a household name in telecommunications and occasionally trades as a penny stock when the market is volatile. Its brand recognition keeps it on many investors’ radars.

5. BIOLASE Inc (BIOL)

• Industry: Dental Laser Technology
• Why It’s Popular: BIOLASE stands out in its niche for developing advanced dental laser tools. Investors seeking exposure to cutting-edge medical technology find the company an appealing choice.

Which Is the Best Penny Stock to Buy in the USA?

The “best” penny stock depends on your investment goals, risk tolerance, and market knowledge. Here are some factors to consider when choosing:

1. Strong Business Model
   Companies like Therapeutics Inc in the biotech sector stand out due to their focus on groundbreaking treatments. Successful clinical trials can lead to massive growth.
2. Financial Stability
   Look for companies with manageable debt levels and consistent revenue. Stocks with strong fundamentals are less likely to face delisting or significant price crashes.
3. High-Growth Industries
   Focus on industries with promising future growth, such as electric vehicles, cannabis, and healthcare technologies. Stocks like IDEX are popular for their connection to the booming EV sector.

What Is the Most Active Penny Stock?

Penny stocks with high trading volumes are usually the most active, driven by market news, investor interest, or trends in specific sectors.

• Sundial Growers (SNDL) frequently ranks among the most traded penny stocks, particularly during cannabis-related announcements.
• Therapeutics Inc (TPTX) attracts significant attention whenever it releases updates on clinical trials or regulatory progress.

These active stocks are attractive to investors because their higher liquidity makes it easier to buy and sell quickly. However, they also come with high volatility, meaning prices can swing dramatically in a short period. This creates opportunities for quick gains but also increasing the risk of losses.

What to Know Before Investing in Penny Stocks

1. Understand Market Cap and Financials

Many penny stocks have smaller market caps, which makes them more susceptible to market fluctuations and financial instability. Always choose companies with solid fundamentals.

2. Choose a Reliable Broker

Find a broker that offers access to NASDAQ-listed penny stocks with low fees and user-friendly tools. Also, ensure your broker is regulated by The U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). 

3. Manage Your Risk

Because penny stocks are risky, consider these precautions:

• Never invest more than you can afford to lose.
• Diversify your portfolio to balance risk.
• Use stop-loss orders to limit potential losses.

4. Be Aware of Regulatory Risks

NASDAQ-listed companies must meet higher standards than those on the OTC market. However, penny stocks on NASDAQ can still be delisted if their prices remain below $1 for an extended period. Monitoring the company’s financial health is quite important. 

Why Trade Penny Stocks on NASDAQ Instead of OTC?

Trading penny stocks on NASDAQ offers several advantages over the OTC market:

• Better Transparency: NASDAQ-listed companies are required to disclose their financial information regularly. This reduces the chances of fraud.
• Higher Liquidity: Penny stocks on NASDAQ often have higher trading volumes. You can buy and sell shares easier.
• Stricter Regulations: NASDAQ’s listing requirements ensure a higher level of accountability, and investors feel more confident.

Key Risks of Penny Stock Trading

Understanding the risks helps you better cope with penny stocks:

1. Stock Price Declines:
   Penny stocks are prone to sharp price drops, especially when companies fail to meet growth expectations.
2. Speculation-Driven Volatility:
   Many penny stocks experience wild price swings driven more by speculation than by real company performance.
3. Limited Data:
   Smaller companies often lack a long history of financial performance. It is harder to evaluate their potential.

Penny Stock FAQ

Can Penny Stocks Make You Rich?

It is possible to earn profits trading penny stocks. But to make big money, you’ll need good trading skills, careful research and effective risk management.

How Much Should You Invest in Penny Stocks?

Start small, diversify, and only invest money you can afford to lose.